Mona Mahajan, Edward Jones senior investment strategist, joins ‘Closing Bell: Overtime’ to discuss her market outlook, market bottom and trends….(read more)
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Don’t expect markets to price in a recession twice, says Edward Jones’ Mona Mahajan
As the world grapples with the ongoing economic impact of the COVID-19 pandemic, there is a growing concern that we may be headed for a global recession. With stock markets experiencing extreme volatility and many businesses struggling to survive, investors are understandably anxious about the future.
However, according to Mona Mahajan, a Senior U.S. Investment Strategist at Edward Jones, it is unlikely that markets will effectively price in a recession twice. In a recent interview, Mahajan argued that while the initial market downturn in response to the pandemic was driven by fear and uncertainty, future market movements will be dictated by economic and corporate fundamentals.
Mahajan points out that markets tend to be forward-looking, meaning that they anticipate and react to changes in economic conditions before they occur. When the pandemic hit, the markets responded by factoring in the significant negative impact on GDP growth, corporate earnings, and consumer spending. As a result, we witnessed a rapid and steep decline in stock prices.
However, Mahajan suggests that the worst of these negative shocks may already be priced in, meaning that future market movements will depend more on actual data and fundamentals. She emphasizes that the market is constantly in the process of reassessing and recalibrating its expectations based on new information. As the economy gradually reopens and data on economic recovery becomes available, market participants will adjust their views accordingly.
It is worth noting that the stock market is not a perfect predictor of the economy. While it can indicate general trends and sentiment, it can sometimes deviate from economic reality due to various factors, including investor psychology, government interventions, or short-term speculation.
Mahajan advises investors not to expect markets to precisely track every twist and turn of the economy, as they are influenced by numerous complex factors. Instead, she suggests focusing on long-term fundamentals, such as the quality of individual companies, their ability to weather economic storms, and their future growth prospects.
In conclusion, while the current economic crisis is still far from over, Mona Mahajan cautions investors not to anticipate a double dip in market pricing for a recession. Instead, she suggests that markets will focus on economic and corporate fundamentals going forward. By taking a long-term perspective and considering the intrinsic value of investments, investors can navigate these uncertain times with greater confidence.
Why are stocks going to carry on going up when we have 5% interest rates and no growth forecast…nasdaq not far off highs reached when stimulus was in effect and rates were rock bottom – it is fascinating seeing people talking themselves into buying stocks at the moment as though this is the last chance. The fed only cuts rates when we are in recession else they stay high – if they do stay high you need to discount future cashflows more – there is basically no way that equities should be priced higher in the short term other than illogical market action with excess liquidity – but everyone is doing their damned hardest to talk up the bull case.
Drop the market!!!!
New highs in 2024. Tech will lead the way
Sounds like she thinks alot and has no idea!
There is evidently going to be a recession first and then a depression. The evidence is greater than the evidence for it not happening. Why do people still think it won't happen? I domt get why people are saying we're already at the bottom and the markets will expand from here. Is worrisome, I'm still at a crossroads deciding if to liquidate my $138k stock portfolio, what’s the best way to take advantage of this bear market?
Terrible advice. Stocks are over valued!
This woman is delusional
All these guys do is talk about headwinds?
Who pay us 31 trillion dollar debt mona mahajan will pay and us market go up
She has no clue, we had a Correction not a Bear maket, we will have a Bear market… patience Daniel Son
The most important thing that should be on everyone's mind currently should be to invest in different sources of income that doesn't depend on the government. Especially with the current economic crisis around the word. This is still a good time to invest in various stocks, Gold, silver and digital currencies.
common sense . all these bears seem to have forgotten we already had a very hard bear market last year . rank amateurs the lot of them
There are lots of mixed opinions about stocks and there projection in the next coming years, I aim for short term solid gains from market correction and I'd definitely jump on the boat if I knew a thing or two about day-trading, but then again what do I really know? I'm just looking for the right moves to grow and hedge my stagnant reserve of $370k from inflation.
@1:15 Oh, ok, well, give me some of whatever she is smoking. The market has absolutely not priced in a recession at all. In fact, it is currently priced as if we are 4-5 years into the next bull run.
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SPX 4800 by December.
Isn’t it inflationary that the market keeps going up because it puts more money into people’s pockets? I think we’re in a bear market bounce which will end at some point.
Wow, did somebody really hire Ms. Mahajan to manage money? According to her, since stocks fell last year and recession is expected towards end of this year, stocks will NOT FALL because they fell once!!
If banks start collapsing Fed needs bailouts 1,5 trillions $ on 16 trillions $ banks funding.And destroy U.S. $
Fed starting printing new money stocks market go up
Higher rates were priced in. Market still thinks we're getting a soft landing.
2022 was not about a recession, it was adjusting prices for higher rates. Market going to fall hard and catch a lot of people off guard.