CFRA doesn't anticipate a U.S. recession in the near term but acknowledges growing global economic risks that could lead to significant market volatility. Despite strong corporate earnings and record-high stock prices, recession risks are increasing, driven by cracks in consumer spending, rising debt levels, and a slowing job market. While the U.S. economy has shown resilience, particularly in consumer spending, much of this spending is now debt-driven, raising concerns about sustainability.
With the Federal Reserve expected to begin a rate-cutting cycle, CFRA recommends maintaining a balanced investment portfolio with a focus on equities, but also highlights the importance of monitoring economic data closely, as the market remains sensitive to any shifts in growth expectations.
