A jarring new survey shows CEOs think a recession could strike as soon as year-end

trader upset angryReuters / Andrew Burton

  • Economists and investors alike have been sounding the alarm on a possible economic recession for months.
  • The New York Times recently surveyed 134 business leaders at the Yale CEO Summit and found that almost half expect a recession to strike by the end of the year.
  • That's the most dire reading yet, and shows just how worried corporate executives are about an imminent economic downturn.

As the current economic cycle pushes further into its late stages, chatter about the next recession is growing louder.

And if the results of a recent New York Times survey are any indication, fear around the next economic meltdown is close to hitting a fever pitch.

The publication surveyed 134 business leaders at the the Yale CEO Summit, an invitation-only gathering where executives from companies like Ford, Verizon, and Morgan Stanley get together and talk shop. It found that almost half of the respondents think the US could face an economic recession by the end of 2018.

Sure, recessionary warning signs have been flashing for months, but most experts have been expecting the axe to fall in the second half of 2019, or sometime in 2020. The fact that such a large percentage of high-ranking executives are so worried about an immediate downturn speaks volumes about the trepidation that's seeped into the business landscape in recent weeks.

One recession signal that's been widely discussed is the yield curve, which inverted earlier this month for the first time this cycle. That implies investors are getting more worried about the immediate future than the long term - a development that's historically been an accurate predictor of recessions.

Investing legends like Ray Dalio and Byron Wien have also expressed concern over mounting recessionary risk. Dalio - the billionaire founder of the world's largest hedge fund - recently explained to Business Insider why the next meltdown will look different than the last. And Wien - the vice chairman of Blackstone's private wealth solutions group - says we're ill-equipped to handle it.

While it may be the most recent, the New York Times survey is hardly the only one sounding the alarm on a recession. According to the recent Duke CFO Global Business Outlook, 82% of chief financial officers see a recession beginning by the end of 2020, while nearly half see it occurring by the end of 2019.

All traders can do at this point is start to position defensively in anticipation for the eventual downturn. To that end, JPMorgan has studied decades of market history and compiled an entire playbook. This type of preparation is perhaps the most prudent approach for what's shaping up to be tumultuous territory.

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