The Pros Are Feeling Anxious... Here's What That Tells Us

Folks, I'm sure you've heard a lot of "doom and gloom" financial forecasting this year... There's no question that fear sells. And to that point, the media has absolutely reveled in the economic hardships that most investors have endured in 2022. [Chaikin PowerFeed]( The Pros Are Feeling Anxious... Here's What That Tells Us By Marc Chaikin, founder, Chaikin Analytics Folks, I'm sure you've heard a lot of "doom and gloom" financial forecasting this year... There's no question that fear sells. And to that point, the media has absolutely reveled in the economic hardships that most investors have endured in 2022. Now, we're facing what many observers call the "most widely predicted recession in U.S. history." And the consensus is that next year will continue to be rough. But this is where the story gets interesting... You see, the various branches of the Federal Reserve collect a mountain of data. And they release a heck of a lot of this data to the general public. One of the standouts is what the Philadelphia Fed calls the Survey of Professional Forecasters. Less formally, it's known simply as the "anxious index." The anxious index is a quarterly report. And the latest update just came out a few weeks ago. By Fed standards, that makes it pretty fresh. In some ways, the results are what you'd expect. The forecasting pros are feeling very anxious these days. That makes sense given everything I mentioned above. But I think some of the report's numbers will surprise you. And perhaps most surprising of all is what it means when the pros feel so anxious. So today, let's take a closer look at the latest data together... Recommended Links: [The Market Hasn't Done This in 15 Years]( Wealth's evaporated. Companies are announcing salary freezes and unpaid furloughs. The price of everything keeps climbing, while the values of our most precious assets like our homes and our investment accounts are depreciating. There's a strange reason why, but Wall Street won't tell you about it. [Click here to get the full story](. [Why a Market "Dead Zone" Could Dominate 2023]( The market is approaching a surprise transition - 15 years in the making. And now the analyst who called the exact day of the Nasdaq peak says a new threat is brewing in the stock market that will likely shape headlines in 2023. [Click here for full details](. At first glance, this chart looks pretty ominous... [Chaikin PowerFeed] The gray areas on the chart are real recessions. And the blue line is the forecasting pros' perceived probability of declining gross domestic product in the coming quarter. In other words... the higher the blue line, the more pros believe we'll see big economic declines. And as you'll notice, that's exactly what they're predicting right now. Something else is important on this chart. And it's easy to see. Just look at when the blue line peaks in comparison with the gray areas that indicate recessions. Since the 1990s, the pros have been largely late on their predictions. When the pros are feeling their worst, the worst of the problem is already in the past. That's intriguing. But it doesn't necessarily mean we're past the worst of today's problems... You see, when our economic problems were driven by inflation in the early 1980s, the pros did a much better job predicting the pain in real time. And there's no question that today's hardships include a major inflation component. Now, I also promised you a surprising piece of data... This survey also includes questions about predicted unemployment rates. And the pros expect unemployment to rise – but not by much... The pros forecast the unemployment rate to move up from today's 3.7% to 4.2% next year. If that doesn't sound like much, that's because it's not. That's less than it was in 2006, not long before the housing bust. And if the pros are right, a tight labor market will continue to push inflation in the coming year. Put simply, it's hard to imagine inflation cooling when employers are competing for employees. So here's our takeaway today... The pros are feeling very anxious. And in recent history, that means the worst is behind us. But looking further back, the pros were able to better time their anxiety in the inflationary period of the early 1980s. And we're facing a similar situation today. We also learned that the pros expect a modest rise in unemployment next year. And importantly, it likely won't be enough to put the brakes on inflation. So as much as it pains me to throw my hat into the "most widely predicted recession" ring, there's a good chance we'll endure a wild market ride again next year. Align your investment strategy with this reality. Good investing, Marc Chaikin Market View Major Indexes and Notable Sectors # Hld: Bullish Neutral Bearish Dow 30 -1.05% 8 21 1 S&P 500 -1.45% 148 271 80 Nasdaq -2.07% 30 53 17 Small Caps -1.54% 566 875 445 Bonds +1.29% — According to the Chaikin Power Bar, Small Cap stocks and Large Cap stocks are somewhat Bullish. Major indexes are mixed. * * * * Top Movers Gainers [rating] TXT +5.26% [rating] EXC +2.68% [rating] EL +2.41% [rating] ACGL +2.32% [rating] T +2.24% Losers [rating] NRG -15.08% [rating] ENPH -7.77% [rating] PARA -6.97% [rating] META -6.79% [rating] SBNY -5.58% * * * * Earnings Report Reporting Today Rating Before Open After Close CPB, THO BF.B, OLLI GME No earnings reporting today. Earnings Surprises [rating] AZO AutoZone, Inc. Q1 $27.45 Beat by $2.14 [rating] GWRE Guidewire Software, Inc. Q1 $0.03 Beat by $0.04 [rating] MDB MongoDB, Inc. Q3 $0.23 Beat by $0.40 * * * * Sector Tracker Sector movement over the last 5 days Utilities +1.98% Health Care +1.13% Materials +0.71% Information Technology +0.62% Communication +0.47% Staples +0.11% Industrials -0.64% Real Estate -0.83% Discretionary -1.25% Financial -2.72% Energy -5.93% * * * * Industry Focus Regional Banking Services 34 88 21 Over the past 6 months, the Regional Banking subsector (KRE) has underperformed the S&P 500 by -2.48%. However, its Power Bar ratio, which measures future potential, is Strong, with more Bullish than Bearish stocks. It is currently ranked #9 of 21 subsectors and has moved down 3 slots over the past week. Top Stocks [rating] IBCP Independent Bank Cor [rating] SRCE 1st Source Corporati [rating] TOWN TowneBank * * * * You have received this e-mail as part of your subscription to PowerFeed. If you no longer want to receive e-mails from PowerFeed, [click here](. You’re receiving this e-mail at {EMAIL}. For questions about your account or to speak with customer service, call [+1 (877) 697-6783 (U.S.)](tel:18776976783), 9 a.m. - 5 p.m. Eastern time or e-mail info@chaikinanalytics.com. Please note: The law prohibits us from giving personalized investment advice. © 2022 Chaikin Analytics, LLC. All rights reserved. Any reproduction, copying, or redistribution, in whole or in part, is prohibited without written permission from Chaikin Analytics, LLC. 201 King Of Prussia Rd., Suite 650, Radnor, PA 19087. [www.chaikinanalytics.com.]( Any brokers mentioned constitute a partial list of available brokers and is for your information only. Chaikin Analytics, LLC, does not recommend or endorse any brokers, dealers, or investment advisors. Chaikin Analytics forbids its writers from having a financial interest in any security they recommend to our subscribers. All employees of Chaikin Analytics, LLC (and affiliated companies) must wait 24 hours after an investment recommendation is published online – or 72 hours after a direct mail publication is sent – before acting on that recommendation. This work is based on SEC filings, current events, interviews, corporate press releases, and what we've learned as financial journalists. It may contain errors, and you shouldn't make any investment decision based solely on what you read here. It's your money and your responsibility.