The Current and Future Economic Outlook by Angelo Kourkafas
Our speaker for October 20, 2022, was Angelo Kourkafas, an investment strategy analyst at Edward Jones. Angelo joined Edward Jones in 2014 as an associate analyst in Equity Research and joined the Investment Strategy team in 2018. He graduated magna cum laude with a bachelor’s degree in business administration from Athens University of Economics and Business and received an MBA with concentrations in finance and investment from Minnesota State University. He was invited to speak by our own resident financial expert, Scott Holder.
Angelo provided a 30-minute bird’s eye view of the current state of the financial markets. His opening comment was helpful: There are some great market opportunities despite the fact that good news seems to be in short supply! He says that the current bear market is in lockstep with the 10-year Treasury bond yield, which is driving stocks lower. Some of this is payback from the pandemic stimulus packages. Other problems driving the poor economic situation include China’s zero Covid policy and the European energy crisis. He expects that bonds will again bring some positive diversification in early 2023. We are now in the 10th month of the bear market, which may start to unwind the current pessimism. For the moment, at least, the U.S. economy remains resilient. The labor market is strong despite other signs of economic weakness. He believes that we will see a (hopefully) mild and short recession in the first part of 2023. He sees some positive economic conditions, including solid banking industry financials, and the lessening impact of recent financial excesses like bitcoin, for example, that might help limit the expected recession.
Angelo notes that things are looking brighter but we can’t yet let off the brakes. There are early signs that the labor market tightness is easing and goods inflation has lessened (although services inflation continues to accelerate.) His view is that peak inflation is behind us. Angelo’s market recovery checklist requires a sustained moderation in inflation, economic and earnings stability, unwinding of valuation excesses, and decreasing pessimism. On the other hand, beware of downward earnings forecasts, which could cause a more significant recession.
Many thanks to Angelo and his helpful and his semi-hopeful market analysis. Let’s all cross our fingers that the current conditions are stabilizing that that we can look forward to upward moving financial markets.
CLICK HERE to see a recording of Angelo's presentation for a limited time.
