Prominent investor Kevin O’Leary said: The US economy is much stronger than people think, and there is “no evidence yet” of a recession or an impending recession.
“I’m not saying we won’t get one, but everyone saying it’s coming next week is wrong,” he told CNBC. “Squawk Box Asia” on Thursday.
“No data, no evidence, no numbers, no trends to slow consumers down,” he said.
The president of O’Shares ETFs said he has invested in a variety of areas, from commercial kitchens and wireless charging to fitness equipment and greeting cards. And he hasn’t seen “any sign” of a recession.
“I see their torn papers every week,” he said. “I think I’ll be one of the first to see it. I’m like a canary in a coal mine in that respect.”
He said the consumption situation is still doing well at the moment.
US GDP fell 1.5% in the first quarter of the year despite strong consumer spending because of weakness in business and private investment.
Difficult call
There are two reasons why recession predictions are difficult, O’Leary said.
The first is that $4.5 trillion has been added to the US economy over the past few years “from a helicopter, to consumers and businesses across the country.”
That’s an unprecedented amount of money being pumped into the system, he said.
“I deal with numbers every week, in terms of what consumers buy with the money they have, they’ve been given so much over the last three years and I’m not in the camp for that recession,” he says. added .
I don’t believe we are in a bad recession. Not yet.
Kevin O’Leary
Chairman of O’Shares . ETF
Second, technology has boosted productivity.
The direct-to-consumer model is now being used in every sector of the economy, which means higher gross margins and more customer data for companies. O’Leary says it’s much more efficient and productive.
“Those who are really saying we are going to experience a major recession are probably wrong and losing profits as this market is slowly turning back,” he said.
Soft landing
The “Shark Tank” investor said, “I’m making a mistake on the soft landing side of my investment strategy.”
He said everyone thinks the central bank is getting out of control, but he thinks Fed Chairman Jerome Powell is in a “pretty good position” trying to balance inflation and employment.
O’Leary pointed out that even if there are signs of a recession or recession, that risk seems to have been incorporated into stock prices due to large corrections in many indexes.
“People tell me it’s the end of the free world because we know they don’t look at data,” he said, adding that some of the private companies he’s invested in already have “spectacular quarter”.
The economy will slow down at some point, but he said he hasn’t seen it yet.
“I believe in numbers, not talking heads. I have talking heads all day long telling me what they think is going to happen. I look at numbers. Numbers don’t lie. . Cash flow doesn’t lie. That’s what I care about,” he said.
“Talking heads make noise. Cash is cash,” he added.
Not everyone agrees.
Former Fed Governor Robert Heller said the US was “very close to a recession”, pointing to a recession in the first quarter and signs that there would be no growth in the second quarter. A recession is defined as two consecutive quarters of decline.
“We’re getting dangerously close because we’re looking at zero growth in the second quarter,” he told CNBC’s “Capital Connection” on Thursday. technical recession”.
