There may be no way out of the recession.
According to investor Peter Boockvar, the latest reports on housing and manufacturing suggest it is rapidly spreading to other areas of the economy.
“People aren’t sensitive enough to this recession and what that will mean for corporate earnings and margins,” Bleakley Advisory Group chief investment officer told CNBC.Quick money“in Monday.
National Association of Builders Housing Market Index / Wells Fargo fell into negative territory in August. This is the 8th month in a row that the confidence of builders has decreased. In a press release, NAHB chief economist Robert Dietz said, “Tighter monetary policy from the Federal Reserve and persistently high construction costs have led to a housing downturn.”
Boockvar predicted a house collapse almost a year ago on CNBC”Trading country. “He warned the Federal Reserve was setting up another case The real estate price bubble will wipe out home equity.
A longtime critic of the Fed, he thinks the central bank would make a grave mistake by raising interest rates and tightening monetary policy to combat inflation.
‘Dangerous territory’
“If you look at past rate hike cycles, the ever-lower Fed funding rates have started to break things,” Boockvar said. “But each successive rate hike cycle ends before the previous one because something has broken. So now we’re starting to get into dangerous territory where everything is at risk. broken.”
There was a worrying second economic report on Monday. Fed’s Empire State Manufacturing Survey in New York for August down 42 points. It is associated with a collapse in new orders and shipments. Boockvar called it an “ugly report” in a note.
However, the major indexes started the week in the green. The Dow saw the fourth consecutive positive day. The S&P 500 and high technology Nasdaq closed higher for the third time in four sessions.
But Boockvar thinks the rally is on thin ice as it soon enters a recession. He lists three stages of a bear market and shows investors are in denial.
“I could argue we’re really just getting started…the second part, where growth is slowing and we’re starting to see an impact on earnings, especially margins. “, he said. “This has a way to get to work through door number two.”
But Boockvar believes investors can still make money. In this environment, he recommends names that are more valuable than driving technology.
“Value will still outpace growth,” said Boockvar, a CNBC contributor. “The valuation of growth stocks, even with these declines, is still quite expensive as there are still so many names of value forgotten that already have low expectations in them.”
He also likes commodity stocks, including precious metal, nature Air and oil.
“Overall, I remain quite bullish on the commodity, acknowledging the drop due to worries on the demand side,” Boockvar said. “But [I’m] remains very bullish on supply-side challenges. “
On Monday, WTI crude fell nearly 3% to close at $89.41 a barrel – after hitting its lowest since Feb. 3 earlier in the day.
