{"id":186344,"date":"2023-03-08T11:30:00","date_gmt":"2023-03-08T16:30:00","guid":{"rendered":"https:\/\/ibkrcampus.com\/?p=186344"},"modified":"2023-03-29T09:42:56","modified_gmt":"2023-03-29T13:42:56","slug":"how-many-times-did-the-economy-fall","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/macro\/how-many-times-did-the-economy-fall\/","title":{"rendered":"\u201cHow Many Times Did The Economy Fall\u2026\u201d"},"content":{"rendered":"\n

Yesterday was a fun congressional hearing – if you held puts.<\/p>\n\n\n\n

“How many times did the economy fail to fall into a recession after raising the unemployment rate by 1%, as you want to?<\/em>” asked Senator Warren (edited for clarity).<\/p>\n\n\n\n

\u201cI think the number is zero.<\/em>\u201d replied Chairman Powell. To his credit, he did not try to run circles around the question and gave a straightforward answer.<\/p>\n\n\n\n

The rest is history, as the market took a nose-dive and closed -1.53% down.<\/p>\n\n\n\n

We highlight two takeaways from this.<\/p>\n\n\n\n

First, it\u2019s a range-bound market. We\u2019ve been saying this over and over. Own equities when S&P 500 has a P\/E above 17x at your own risk.<\/p>\n\n\n\n

Second, the risk of a recession is still here. Powell can hike the front-end but the back end seems anchored and 10y US Treasuries are looking more and more attractive<\/strong>.<\/p>\n\n\n\n

What stocks are doing well today?<\/h2>\n\n\n\n

This section is powered by Open AI connected to TOGGLE AI<\/em><\/p>\n\n\n\n

Thanks for all your feedback! This section is paused for a week as we take in all your ideas and come back with a new and enhanced version!<\/p>\n\n\n\n

TOGGLE Leading Indicators: So it was a dead cat bounce\u2026<\/h2>\n\n\n\n

And now we\u2019re in limbo. Indicators are all neutral, so let\u2019s watch where the market goes.<\/p>\n\n\n\n

One would be tempted to buy straddles, but our VIX Valuation indicator is showing vols are expensive.<\/p>\n\n\n\n