Investors must get ready as indicators of an impending recession grow.
Numerous indicators are increasingly pointing to a recession, including sluggish readings in the manufacturing and services sectors, declining payroll growth, and rising oil prices. The manufacturing index for March, at 46 points, was the lowest since May 2020. 11 of the last 12 times that manufacturing readings fell below 45, recessions occurred. The non-manufacturing ISM reading was the fourth-lowest since the Great Financial Crisis.
Combined with February’s 326,000 increase, the nonfarm payrolls report from April 7, 2023, which showed growth of 236,000, will probably be the last strong payroll report of 2023.
Treasury bills are the best asset to invest in when a recession is about to start because they will continue to perform well until the Federal Reserve starts lowering interest rates.
As the unemployment rate rises later in the year, the Federal Reserve will probably have to start loosening up by cutting rates which will weaken the U.S. dollar. The best devaluation strategy for the US dollar is gold.