Recession Coming?

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9. take all advice with a huge grain of salt, mine included. having said that...

the economic expansion under obama since the "great recession" is already the longest ever; another four years without a recession is just not going to happen. it's a question of when we have yet another republican recession, not if.

moreover, "don't fight the fed" is time-honored wisdom, and bull markets usually stall out around 6 months after the fed starts raising interest rates. this hike cycle is unusual in that the fed is raising rates extremely slowly, but that will accelerate, meaning we don't have much upside potential left.

it's reasonable to assume that, with republicans controlling everything, they'll rack up a lot of deficit spending, considering things like the wall and, of course, huge tax cuts for the rich. and most importantly, democrats not in a position to stop their irresponsibility. this is temporarily good for the economy and the stock market, though a lot of that is anticipated and already priced it.

i can see the rally continuing for another 2-6 months, but after mid-year, it's hard to see where the upside comes from. rates will be higher, and worry about a trade war or even just uncertainty over trade negotiations will delay plans, which will grind the rally to a halt or worse.

if you take donnie at his word that he wants businesses to bring jobs back to america, well, they may be good for american workers, but it does mean less corporate profits and lower stock prices. and that's assuming it works. more likely, it doesn't, and only a few jobs "come back" (hey donnie, we're already at full employment) and the trade uncertainty and retaliation possibilities only reduce economic activity and profits.