Global Strategist: U.S. In Non-Recession Bear Market

Notwithstanding a lagging stock market, indicators suggest the U.S. economy may be slowly trending upward.

Mar 17, 2016, 15:40 ET from Provasi Capital Partners LP

DALLAS, March 17, 2016 /PRNewswire/ -- Despite the fact that U.S. stocks saw their seventeenth worst start of a year (January-February, 2016) since 1928, the U.S. economy is slowly strengthening and not entering into a recession, writes Provasi Capital Partners' Chief Global Strategist Rick Golod in his latest investment outlook. Golod cites several key indicators, such as:

  • The University of Michigan Consumer Sentiment index was 91.7 in February. At the beginning of past recessions, the index averaged 79.3.
  • U.S. consumers' personal income rose 0.5% in January, the most in eight months.
  • Auto sales have held above 17 million annualized units for seven consecutive months—the best run since the tech boom.

Despite these positive indicators, all major regional markets are technically in bear market territory (down 20% from previous high). Golod emphasizes that it is important to understand that there are actually two types of bear markets: 

  • A classic bear market—in which the median U.S. stock declines 34% (with greater declines overseas). In this scenario, investors should continue to sell into rallies to avoid greater future losses.
  • A non-recession bear market—in which the median U.S. stock decline is
    -19%. Considering the proximity of the recent S&P 500 index decline from its previous high (-15.2%), investors need to decide whether to sell the rallies.

"I think we are in a non-recession bear market and further upside will likely be limited by the lack of earnings growth due to margin pressures and the absence of top-line revenue growth," says Golod. "This is an important time for investors to rethink their investment strategy. Avoiding major drawdowns in a portfolio is an important component in generating targeted investment returns and meeting investment goals."

As the chief global strategist for the firm, Golod speaks at national conferences and industry round tables. He regularly hosts educational Webcasts for financial advisors and broker-dealers, is active on Twitter @RickGolod, and provides insights and analysis of global market trends. 

To access the complete outlook, visit provasicapital.com/insights.

The opinions referenced are those of Rick Golod and are subject to change at any time due to changes in market or economic conditions and may not necessarily come to pass. These comments are not necessarily representative of the opinions and views of other Provasi Capital Partners professionals. The comments should not be construed as recommendations, but as illustrations of broader themes. Forward-looking statements are not guarantees of future results. They involve risks, uncertainties and assumptions. There can be no assurance that actual results will not differ materially from expectations. Past performance is neither indicative nor a guarantee of future results. Provasi Capital Partners LP and/or its affiliates may sponsor, co-sponsor and/or distribute securities in investment sectors reviewed in this material. Rick Golod is a registered representative of Provasi Capital Partners LP.

About Provasi Capital Partners LP

Provasi Capital Partners LP offers access to specialized investment strategies through a multi-manager approach presenting advisors and their clients with unique options for allocating capital, managing risk and diversifying assets. For more information, call 866.655.3600 or visit provasicapital.com. Member FINRA/SIPC.

Jonathan Ball
Provasi Capital Partners
jball@provasimail.com
972.387.5403

 

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SOURCE Provasi Capital Partners LP



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