It doesn’t seem so long ago that the market pundits were calling for a 100% chance of recession. 2023 just wrapped up with GDP growth of 3.1% for the calendar year, cementing the notion among investors that, not only is a recession likely not imminent, it may not actually come at all at this point. I still think it’s too early to make that call and feel that there are several indicators out there still flashing warning signs that economic risk is still present.
One of the things that really concerns me is the gap between the haves and the have-nots, not just in the United States, but globally. The Q4 GDP report looked like a “sell the news” event. The typical beneficiaries of a cyclical recovery trade - small-caps, value and industrials - saw a brief pop following the report, but that faded pretty quickly. Utilities, of all sectors, saw a bounce following the release, but it’s been carnage in that sector for the better part of three weeks.
