I can’t believe the complacency in this market. The S&P 500 is trading 4% from 4 year highs. But indicator after indicator keeps missing. Multinational companies that sell to every region of the world, like PG and NKE, are telling us that sales are weak. Policymakers are scrambling to stop the growth slide. So after today’s jobs report, I expected to hear more people discussing a potential recession. But no one is mentioning the “R” word.
So I got curious. What would Google Trends say about the word “Recession”? Here is the chart:
Both the Search Volume index and the News Reference volume index are near 4 year lows. Meanwhile, economic data is also close to 4 year lows. As I showed in my CotD from last week, this ain’t 2010 or 2011. 2012 looks much worse. However, “recession” fears are not showing up in the press at anywhere close to the level of 2010 or 2011. As usual, when it’s finally time to worry, everyone assumes it’s another false alarm.
This year’s data does not seem to be another case of the Boy Who Cried Wolf for me. Global weakness is evident on multiple fronts, with company-specific commentary backing up the macroeconomic data. And for those looking in the right places, many investors are in fact positioning for a potential recession. Defensives continue to trade well. The dollar and bonds are near new highs. Complacent stock investors beware.