Pre-marketing stocks: Can you fall into recession?

“If you’re not a little confused about the economy, you’re not paying attention,” said Jason Furman, a former White House economic adviser who currently teaches at Harvard University. Recently tweeted..

Consumers are very pessimistic, but spend more than last year, according to the latest retail sales data. Employment numbers remain strong and unemployment is approaching record lows, but economic production is slowing sharply. In the first three months of the year it shrank.

Is the United States approaching a recession, or is it already in a recession, and if not, is there enough anxiety to make it happen when nervous companies and consumers start? There is controversy among policy makers and investors about whether or not. Pull back.

“I don’t think we should be in recession,” US Secretary of Commerce Gina Raimondo said earlier this month.

Two camps are beginning to form. One is represented by the White House, which claims that while the US economy was in a slump, there was no recession as normally defined.

“This is not a recessionary economy,” Treasury Secretary Janet Yellen said in “Meet the Press” on Sunday. “But we are in a transitional period of slowing growth.”

Former US Treasury Secretary Larry Summers supported another view in an interview with CNN’s Fareed Zakaria. This focuses on what the data is not currently showing, but what may happen next.

“I think the recession is very likely,” Summers said. “When we were in this situation before, the recession was essentially always going on.”

His concern lies in the challenges of Heracles facing the Federal Reserve. Central banks are rapidly tightening interest rates to curb inflation, which pushes up borrowing costs and risks encouraging a sharp recession in economic activity.

The Federal Reserve hopes to design a so-called “soft landing” that will reduce inflation without a recession, but Summers is skeptical.

“When inflation is high and unemployment is low, soft landing represents a kind of hopeful victory over experience,” he said.

Finally, one definition of recession is when the economy experiences a negative GDP for the second consecutive quarter. In the first three months of this year, production declined at an annual rate of 1.6%. This will raise stakes on Thursday’s first survey of GDP data for the second quarter.

However, the call for recession that economists and policy makers are paying attention to comes from the Business Cycle Date Committee of the National Institute of Economic Research, which “spreads the recession throughout the economy and continues for more than a few economic activities. It is defined as “a significant decrease in”. Several months. “

In a recent blog post, the White House said, “Some people argue that two consecutive quarters of real GDP declines constitute a recession, but that’s neither an official definition nor a way for economists to assess the state of the business cycle. “.

The big picture: Don’t expect the NBER to come and go soon. We waited until June 2020 to announce that the coronavirus recession began in February last year, but it was faster than usual. This means that no matter what happens later this week, the recession debate is likely to continue for months.

Meanwhile, business leaders are becoming more and more vigilant. According to the latest business situation survey by the National Association for Business Economics released on Monday, 43% of respondents believe that a recession is likely in the next 12 months. Only 13% maintained this position in April.

Despite the turmoil of travel, airlines are making money again

Traveling this summer is a nightmare, as long lines, delays and cancellations turn the flight experience into a major headache.

But even with soaring costs and widespread service interruptions, airlines are making money again.

With this alone: ​​Low-cost carriers Ryanair (((RYAAY). On Monday, he earned € 170 million ($ 174 million) in the three months to June, compared to a loss of € 273 million ($ 280 million) in the same period in 2021. Said. Stocks have risen almost 2% in early trading.

Demand recovered significantly and traffic was above pre-Covid levels, helping to offset the significant increase of 560% in the amount Ryanair paid for fuel.

last week, American Airlines (((AAL). When United Airlines (((UAL). Both reported their first operating profit since the pandemic began. But good news for investors was bad news for customers. The amount paid to fly every mile has increased by more than 20% compared to 2019.

Ryanair said average fares were down 4% compared to the same quarter before Covid.

While under the brunt of frustration about the state of air travel, carriers hold blame on airports and government officials. They say that slowing staff backup efforts has led to a shortage of workers, causing long lines.

“They had one thing to do, which was to have enough handlers and security staff,” Ryanair Chief Financial Officer Neil Sorahan said in an interview Monday. “They had a schedule a few months ago.”

Volkswagen’s destructive CEO is unemployed

As CEO of Volkswagen (((VLKAF)., Herbert Diess designed a major strategic shift. An 85-year-old German car maker will bet on electric cars for the future.

By the way, it is reported that Dís was pushed out by a surprising movement. In September he will replace Oliver Blume, head of the Porsche division.

“He is now the right person to lead the group and further strengthen its customer focus and brand and product position,” Hans Dieter Petch, chairman of the company’s board of corporate auditors, said in a statement. ..

Big question: What does this mean for Volkswagen’s ambitions? Under Dís, UBS analysts said Volkswagen was the fastest-moving legacy car company to “often compare to Tesla and other destroyers for the future of all electricity.” I am.

VW has announced that it will invest € 89 billion ($ 91 billion) in EV development over the next five years, accounting for about half of the planned spending during that period. We aim for EVs to account for a quarter of sales by the end of 2026.

The UBS team expects the company to continue its course with a clear direction in terms of customer demand. But investors don’t love uncertainty. Stock prices fell in early Monday trading.

Since Dís was appointed CEO in 2018, they have reduced by 25% and increased by only about 10% so far.

On Radar: The company’s luxury Porsche unit was scheduled to be released later this year on the long-awaited list, although the volatile market poses a risk. Leadership shake-ups add questions about timing.

next

Whirlpool (((WHR). We report the results after the US market closed.

Coming tomorrow: Google earnings alphabet (((Google)., Microsoft (((MSFT)., 3M (((Hmm)., coca cola (((KO)., GM (((GM)., McDonald’s (((MCD). When visa (((V)...

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