Eating, drinking, and having fun. Will a mild recession be the last straw to crush the US economy?
Since this year, the recession has come like a wolf, shouted many times, but never came. The unemployment rate is at a record low, and wage growth is still strong. Is the US still going to recede?
In my opinion, Americans' eating, drinking and having fun is probably the last straw to crush the economy. It can also be said that it is a lifesaver held tightly by the US economy on the edge of a cliff. Expectations of a so-called “mild recession” are likely to lead to a very serious recession.
Since the beginning of the year, if you want to ask which stocks have been rising like a rainbow, people are likely to say: Definitely $NVIDIA(NVDA.US$ ， $Advanced Micro Devices(AMD.US$ ， $C3.ai(AI.US$ ， $Microsoft(MSFT.US$ , and $Tesla(TSLA.US$ ， $Intuitive Surgical(ISRG.US$ Big tech and various AI concept stocks like that.
But I'll give you a few other examples:
$Chipotle Mexican Grill(CMG.US$ Since this year, it has risen by more than 40%
$Shake Shack(SHAK.US$ , up more than 60%
$Royal Caribbean(RCL.US$ , up more than 50%
In addition, $Netflix(NFLX.US$ ， $AMC Entertainment(AMC.US$ They all had good gains. $Disney(DIS.US$ Although it was taken off by the streaming media, the theme park is extremely popular. These are all food, drink, and play without exception; there are few other uses.
On the other hand, the performance of electronic products and automobiles that really drive economic development is poor. $Apple(AAPL.US$ $Tesla(TSLA.US$ $Intel(INTC.US$ Wait, that's a lot worse than last year. The retail industry, such as $Target(TGT.US$ $Costco(COST.US$ , I'm not having a good day, and department stores, such as $Macy's(M.US$ , stock prices have all fallen back to the last century![]()
, if not, it would be like $SEARS HOLDINGS CORP(SHLDQ.US$ with $Bed Bath & Beyond(BBBYQ.US$ , gradually leading to bankruptcy.
Off topic, the largest chain of mother and child stores in the US is Baby RUS, and the other is Buy Buy Baby. Their parent companies all went bankrupt![]()
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Kids, who is this offending![]()
Getting back to the point, Americans' consumption is a bit like a pre-apocalyptic carnival. Although it boosted the economy, it was unsustainable. If the US economy wants to grow, it needs to be driven by the technology industry.
Looking back over the past 20 years, the Internet has indeed boosted the prosperity of the US economy. However, 2000 years ago, when the internet was just emerging, interest rates were also high, but they couldn't stop capital's hype about the bubble. Later, everyone knew that the.ai bubble burst. Oh no, it was the .com bubble. After the capital hype, it was bound to be a blunder. Many companies directly went up in smoke and survived $Amazon(AMZN.US$ It took ten years for the stock price to return to a high point. And the hard currency that dominated the tech world back then $Microsoft(MSFT.US$ It also took more than ten years to reach a new high. Admittedly, if it hadn't been sold, there would now be a 20x return. But how many more decades of investment? Also, who can secure stocks that haven't paid back in ten years and not sell them?
I think the current AI is about the same as the internet in 1999. If AI continues to develop, there is a high probability that it will lead the US economy to lead the world in the next 20 years. However, stocks that are seriously overvalued may take many years to be unbundled if bought at the highest point.
The bubble will blow bigger and bigger before it bursts. If you are bold, you can go in and take a bite, run after eating a big piece of meat, and earn a lot of money. I'm a bit timid, so I won't play this game.
And the best investment opportunity right now, I think, is long-term bonds $iShares 20+ Year Treasury Bond ETF(TLT.US$ The Federal Reserve cannot maintain high interest rates for a long time; it will inevitably cut interest rates. Long-term bonds have a 100% chance of making money within the next three years. There is no risk; the more they fall, the more opportunities. As for the stock market, the .ai bubble back then, oh no, when the .com bubble burst, S&P fell continuously for three years from a high point in 2000. It only reached a new high in 2007, then suddenly collapsed again. It wasn't until 2013 that it actually paid back.
Will US stocks in 2023-2032 be as bleak as 2001-2011? I hope not. However, there are always investment opportunities. Although S&P hasn't risen in ten years, long-term bonds $iShares 20+ Year Treasury Bond ETF(TLT.US$ It doubled between 2001-2011.
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本人散户，闲钱投资，名字为富图系统生成。这里记录投资感悟与趣事。所有言论都纯属娱乐，不是投资建议。㊗️大家越来越🐮
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高贵的阿德莱德 OP : In America today, there is a bubble in almost every asset, from the stock market to real estate, and is even equivalent to the bubble of 2000 and 2008 compounded together. The Fed's interest rate hike this time just squeezed out the bubble. If it can use interest rate hikes to pass on the economic crisis, knock down a major economy, and keep the US from taking blood, then America will be stable again.
mubbiiee : I agree it's not cheap overall, spy 19 times PE is there after all. However, the retail stocks you mentioned, Macy, 3B, etc., were also going downhill; sooner or later, they were killed by flax and other e-commerce businesses. TLT isn't cheap either; it's very likely that it will drop to 90 or even a bit. There is also a risk that interest rates may fall, but they may never return to a level close to zero, or even 2%. In this way, the TLT you bought at the current price will stay locked in for a long time.
亲切的罗宾 : The analysis is very good, so what do you think is a good entry point for DIS? I think 80-85 is safer
高贵的阿德莱德 OP mubbiiee : tlt will probably continue to fall, but I think it will be difficult to drop to 90. The last time it fell to around 90 was a panic attack. At the time, I didn't know where the end point of the rate hike was. Now that the interest rate hike has come to an end, the certainty is even stronger. If interest rates are raised more than expected in the future, or if interest rates remain high for too long, long-term bonds will fall, but the stock market will be even worse. Once the economy enters a recession, it is still beneficial to bonds due to risk aversion. Short-term bonds have the risk of default, while long-term bonds have no risk of default
高贵的阿德莱德 OP mubbiiee : On the other hand, I also agree that it is impossible for interest rates to drop to zero again in the short term; otherwise, inflation will not be able to hold back. However, if interest rates continue to fall, the economy will collapse; in fact, I am very worried about this. The US economy is already inseparable from low interest rates, and the QE crackdown cannot be stopped![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
高贵的阿德莱德 OP 亲切的罗宾 : If it were me, I'd wait for technical signals, have a bullish line of volume and short-term moving average, and then enter the market on the right
wantqq123 : Every time I write this much, I just go to the oil pipe and post a video
mubbiiee 高贵的阿德莱德 OP : After the debt ceiling is raised, intensive debt issuance in the second half of the year+ if the Federal Reserve actually falls short of expectations for QT+ interest rate cuts, TLT will plummet.
mubbiiee 高贵的阿德莱德 OP : If it cannot be cleared out this time, if inflation expectations are completely eliminated and interest rates are cut, there will almost certainly be a second wave. Of course I don't mind eating the band over and over again.
高贵的阿德莱德 OP mubbiiee : What you said makes sense; you really need to be aware of this risk. If there is such a sign, the stock market and long-term debt will fall, and they will still have to go back to short-term debt to take refuge