Recession Trades to the Rescue

S&P 500 finally turned south in line with the medium-term outlook, in reaction to the wildly underwhelming JOLTS data. Job market deterioration is finally getting reflected as per the Mar/Apr timeing for issues to arrive that I discussed earlier. Unemployment claims rising and finally non-farm payrolls would come to reflect that.

Today‘s employment change is first such a sign, but all eyes are on Friday‘s non-farm payrolls. The bears are aligning for a pleasant surprise as buy the dippers are bound to get increasingly overpowered. Expect more risk-off in bonds and the surge in precious metals to continue at its own pace higher (my star pick for 2023).

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Let‘s move right into the charts (all courtesy of www.stockcharts.com).

Gold, Silver and Miners

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Very fine recession reaction – lower yields sending down the dollar as the Fed can‘t remain this restrictive, the market thinking goes. Silver doing well as inflation is undefeated.

Crude Oil

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Oil is consolidating high ground, and would be far less hurt than copper through the recession jitters. Well, I say jitters, but markets obviously have to overcome the misguided no landing first. In doing so, they may very well start questioning the soft landing too...

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