BCA’s Peter Berezin: “The consensus soft-landing narrative is...

BCA’s Peter Berezin:

“The consensus soft-landing narrative is wrong. The US will fall into a recession in late 2024 or early 2025. We were tactically bullish on stocks last year, turned neutral earlier this year, and are going underweight today.

“We conservatively expect the S&P 500 to drop to 3750 during the coming recession, he also said. “Such a drop would bring the index back to where it should be based on our estimate of the net present value of future earnings. Our fair value calculation is quite conservative in that it simply assumes that S&P 500 revenues rise in line with nominal GDP. That may be too optimistic.”

I hope this is a data error, but LinkUp’s estimate of job openings posted by America’s top 10,000 companies is crashing.
https://x.com/PeterBerezinBCA/status/1806321318930837806

State-level unemployment rates are calculating in a more holistic manner than the national unemployment rate.
BCA’s Mel Rule mirrors the Sahm rule except that it is based on state data. The Mel Rule has now been triggered, suggesting that a recession is likely.
https://x.com/PeterBerezinBCA/status/1805681794697539792

I expect the S&P 500 to fall to 3750 during the next recession. This target assumes two things: The forward PE ratio drops to 16, which would still leave it above the 2012-19 average; and that EPS estimates decline by 10%, which is also quite conservative. That’s it.
https://x.com/PeterBerezinBCA/status/1804151593517867493