It is not yet clear when and how the recession will come, but in America and China there are even signs of recovery. Thus in the podcast “On the 4th floor”, Alessandro FugnoliStrategist of Kairos, proposes his analysis of the current market context.
The monetary and fiscal stimulus of 2020 and 2021 was indeed so strong that its effects are still being felt. The slowdown in the first half of 2022 was confined to manufacturing and in particular to its inventories, which were excessive and were reduced through a reduction in production. Inventories are now nearly in balance, while year-end purchases loom higher than last year.
However, the stability of the economy is accompanied by ainflation more tenacious and persistent than expected. Central banks therefore see no insurmountable obstacles to the continuation of monetary normalization. Rates will therefore continue to rise until February. From then on, we will stop for a few months to measure the effect of the massive restrictive movement. Only Quantitative tightening will continue.
But looking at Europe, according to the Kairos expert, the situation is decidedly more fragile, thanks to the energy problem. In Europe, the recession has already started, but in the presence of an America and an Asia that are still doing quite well, the Old Continent, Fugnoli points out, should not plunge into too deep a recession. But the medium-term horizon remains clouded and it will be very difficult for America to avoid a recession. Strategically with regard to investment portfolios, therefore it is still necessary to have a lot of caution because the turning point of the cycle is still far away and could still take 12 months to wait. Tactically, however, or in a three-month horizon, the recovery can be played with some targeted purchases.