This week, Zacks Equity Strategist Mayur Thaker, CFA discusses:

• The latest entry in his regular series of macro updates. Mayur reviews the growing number of macroeconomic indicators that signal that a recession is ahead, though perhaps not imminent. Manufacturing gauges have been in recession for 18 months; the 10y – 2y UST yield curve has been inverted for 23 months; employment indicators including permanent job losers, cyclical employment, JOLTS and others are entering contraction; excess savings is nearly exhausted; and credit card delinquencies are rising…to name just a few.

• Meanwhile, the stock market continues to barrel ahead thanks to what Mayur characterizes as a “Goldilocks” blend of conditions including easing inflation, easing long-term yields, and more. While analysts look for 10% EPS growth in 2024, Mayur believes these estimates will be marked down as the sharp rise in the cost of capital will inevitably lead to rising delinquencies, defaults, bankruptcies, and ultimately job cuts.

• When does Mayur predict the recession will take hold? He doesn’t offer a specific date, but offers three key metrics for investors to watch that will signal when it’s time to go “full-blown defensive.” He also offers a defensive portfolio that he believes will offer investors the best protection from an economic downturn. Find out what Mayur’s key recession warning signs are in this week’s video, and be prepared for whatever the market brings in 2024!