Mild recession could play as a catalyst for US equities

Economists see the upcoming mild recession as a catalyst to kick-start the bull trends for US equities. According to this viewpoint, mild recession equals restart of the secular bull run.

Seven of the last eight Fed hiking cycles triggered an economic recession, and US stocks historically do not bottom until a recession has started. So, economists expect a US recession to begin in the first half of 2024, and believe a mild recession would be a catalyst for a re-start of a secular bull market in US stocks. Until then, we expect US stocks to stay in a range of 3500-4200.

Within US stocks, economists prefer defensive growth over value, large cap over small cap and staples and Industrials over consumer cyclicals and financials.