May 8, 2023
On this week's Stansberry Investor Hour, Dan and Corey are
joined by Chris Igou. Chris is a fellow Stansberry Research analyst
and the editor of DailyWealth Trader, a daily trading
advisory. But first, Dan and Corey argue that banking
regulations "hand the incumbents an advantage" and restrict
competition. According to Dan, consolidation in the banking
industry – like JPMorgan Chase's recent takeover of First Republic
Bank – can create backstop and incentive issues. Dan also shares
his belief that interest rates will remain higher than expected for
longer, despite the market consensus for the Federal Reserve to cut
Then, Chris joins the conversation to discuss his trading style and macroeconomic outlook for the market. He shares how the Fed's rate hikes are increasing the cost of borrowing and squeezing earnings, leading to smaller profit margins. Chris also notes that the S&P 500 Index's most significant drawdown in this current bear market has been 25%. That number is relatively normal for a bear market, since the average drop during a recession is typically around 40% from peak to trough. He explains...
"We've got some time where credit is going to be tight and unemployment is still at 3.5%... Historically, you just don't bottom there."
Finally, the trio analyzes previous false bear market rallies that would get investors excited and optimistic before hitting a sudden downturn. Chris warns that the same could happen this time around. He cites the bear markets of 2000, 2008, and 2020 as examples and shares that he expects more pain in the coming months based on historical patterns.
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