My stance: Optimistic about the current market.

From certain perspectives, the economic conditions demonstrate remarkable resilience. Take corporate profits, for instance, which are currently at an all-time high. In the second quarter of 2024, they reached a record $3.23 trillion, marking an 11.2% increase compared to the previous year and a significant 57.3% surge from the second quarter of 2019.

Although corporate debt levels are high, they are not expected to be a significant concern in the near term based on the data currently available. The most recent figures, which cover the third quarter of the fiscal year 2023 for interest coverage ratios of public non-financial corporations in the U.S., still comfortably exceed those of previous years, indicating that companies are not facing difficulties in covering their interest expenses. With interest rates now declining, the ability to refinance debt and lock in lower fixed rates could potentially further strengthen this financial metric.

Of course, circumstances may evolve over time. As the Federal Reserve's projections indicate, there could be a decline in the interest coverage ratios of these companies. However, in the baseline scenario, even the Fed describes the financial health of these businesses as robust. And even in a scenario that anticipates a hard landing, the interest coverage ratios only drop to levels that are within the historical range.