UBS looking for a modest recession, rolling across segments, unlikely before year end

A note from UBS’ America’s asset allocation folks says not expect a ‘standard’ recession:

• the manufacturing sector has already mildly contracted and could start recovering by year-end
• the economy may instead experience rolling recessions across different segments

Factors that are pushing back a recession onset include:

• central bank monetary policy is not yet restrictive enough to cause a contraction
• fiscal policy is marginally expansionary and indeed is fuelling investment

UBS say that:

• The net result could be a very modest recession overall with unusually low job losses, an outcome very similar to a soft landing

As for timing:

• Such a recession is unlikely to start long before the end of the year

Meanwhile:

• US stocks close higher (and near highs for the day) for the 2nd consecutive day

This article was written by Eamonn Sheridan at www.forexlive.com. Source