Watch These Key Recession Indicators Closely

Transcript

Ken Fisher:

Pretty much every year, particularly early in the year, I get this question, "Do I think there's going to be a recession ahead this year?" There's things that cause recession. There's things that don't. When the things that people fear have been widely anticipated for a long time, they tend not to cause recession because businesses and people have been able to have the time to do whatever they have to do to adjust themselves against those factors. But that usually takes them anticipating them a year, or maybe a little longer. I'm not talking about weeks. I'm not talking about months.

In this case, I don't really know the right answer to your question, and let me tell you why. I mean, it's a great question, but I don't know why. Let me put it into perspective and tell you how it could play this way and that way, and how that also relates to some other features. First, I want to say the following: we never get a recession unless the US stock market and the global stock market have peaked from an all time high and gone down for 3 or 4 months. Then after that, a recession may start, but it won't start any sooner than that.

So, some people will say pretty commonly now, but they're wrong, "We're in recession now." I will tell you, if that's the case, it is something that has never happened before. And I do not believe it's the case. And I can measure that in many ways. We got a peak in the US and global stock market at the end of February, and so we're not close yet to that three, four month time period that I was talking about. That's a minimum requirement for falling stock prices before you get to the, and it doesn't matter because people will say, "Oh, but take these seven stocks out." "Take those 22 stocks out." "Take this out, take that out." It's like, no, not that. Just take the whole darn market. Take the world market. Take the S&P 500. Take both of them. You got to get both of them down that long. So then when you think about that a different way, that doesn't preclude the question that we could have a recession this year.

As we started the year, I did not believe that we would have a recession. And I don't particularly believe we'll have one now, but we might, because what President Trump is doing in tariffs is terribly destructive, not just to things outside the United States, but even worse to things inside the United States. While I do believe he's well intended, I think he's just wrong about fundamental things that he thinks. But the tariffs that he would impose, if they're sustained, either the reciprocals that he announced on April 2nd, or the 10% universal that he announced for everyone else, or as adjusted on April 9th. When he said for 90 days, his so-called reciprocal tariffs, which aren't really reciprocal, wouldn't be imposed while he tried to negotiate deals. But everybody would have a 10% tariff except for China, that he would treat separately at higher rates.

Any and all of that is bad. None of it accomplishes what he thinks it will accomplish. None of it. He somehow on this matter and all of the advisers that he hand-picked around him as people that already agreed with him on all this stuff, don't actually know what they're talking about. I've never seen a circumstance like this, ever. People are squawking at all of them now big time. From all around them, reining them in.

That's why April 9th happened. I know for a fact that the comments, the Treasury Secretary Bessent said on April 9th, when they put the pause in place, that this had been the plan all along, is a bald faced lie. That was never the case. Why they would say that, at this point, is just somehow trying to save face. But as we move through this 90 day period, if it does not resolve that President Trump and crew have negotiated some deals and then put all of this nonsense behind us, or 90% of all this nonsense behind us, you'll see a very bad economic effect that will cause recession, and it'll be recession before the end of the year. So, how do you think about that? Well, again, you watch on one hand to see what the stock market does over the next 90 days. On the other hand, you look for those deals and then you look to see what the president and his advisers do as those 90 days progress.

Now, I'm just going to say to you, that I almost have an allergic reaction whenever I hear these people talking. I'm going to say, I'll tell you this just so you get it clear: You know, from the days that I was in college, I've been a Republican. I've been a major donor of House and Senate races for a long time. So, saying all this stuff is not a something I'm really happy about. But the fact of the matter is, all this trade stuff is right down my wheelhouse. I understand exactly how it works. It's a whole another discussion, not for this video. But if they keep doing the back and forth, on and off, you know, now we're putting in a 90 day pause. Oh, but you know, we're going to put in these tariffs on semiconductors. But the semiconductor tariffs aren't going to apply now, but they'll reapply, Oh no no. Two days later we're going to reimpose them into two months.

All said by different advisers. As if they don't have any coordination between them. It begins to look like some version of Amateur Hour or a variation of the Three Stooges with another five stooges thrown in. And if they keep going down this path, they don't come to mostly reduce all this tariff nonsense, and then move forward in a more or less straightforward path, they will turn us into recession. The back and forth part is bad because it causes businesses of all types to say, "I don't know if they're going to hit me next. I better do nothing now. I better duck and cover."

It's the tariffs are bad. Tariffs, I'll just tell you really simply, and I'm not going to put up a lot of time on this, maybe for another video. Tariffs always hurt, I mean we have a long history, a multi hundred year history of tariffs, and they always hurt the the country that imposes them more than they hurt the country that they're imposed upon. Or what I would like to say is, while there's good intentions, usually, when countries impose tariffs, they're bad for the country that does it. The imposer is a poser. It's not good. It's always bad. The question is, how bad? Tariffs can help a given industry, but at a bigger cost to the rest of the economy. They can help multiple industries, but at an even bigger cost to the rest of the economy.

The only justifications ever for tariffs are in things that relate singularly to national security, one way or another. And yet, this current administration has applied that moniker to a broad category of things that have nothing to do with national security, because they believe in tariffs, and they believe it will generate revenue that it'll never generate. They believe it will make manufacturing come back to America, which it will not. Even though they'll say that it's going to and they'll say that they're making progress on those things.

This all needs to reverse significant, or in whole, or we will have a recession. And you'll be able to look at that over the next 90 days and see if they make progress on what they're doing with trade deals or not, and then what they do with these tariffs afterwards. And that's my spew. If they do these well, the stock market will perform well. It'll go to new highs. If they do this badly, you'll see devils ahead. Do I know what will happen right now? No. But stay tuned, because we'll probably have more videos on this month-to-month moving forward here. Thank you so much.

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