#loans #youtube #stockmarket
NewEdge Advisors Cameron Dawson joins Yahoo Finance Live anchor Rachelle Akuffo to discuss equities, bank earnings, rising interest rates, investor sentiment, and the outlook for markets.
Subscribe to Yahoo Finance:

About Yahoo Finance:
At Yahoo Finance, you get free stock quotes, up-to-date news, portfolio management resources, international market data, social interaction and mortgage rates that help you manage your financial life.

Yahoo Finance Plus: With a subscription to Yahoo Finance Plus get the tools you need to invest with confidence. Discover new opportunities with expert research and investment ideas backed by technical and fundamental analysis. Optimize your trades with advanced portfolio insights, fundamental analysis, enhanced charting, and more.
To learn more about Yahoo Finance Plus please visit:

Connect with Yahoo Finance:
Get the latest news:
Find Yahoo Finance on Facebook:
Follow Yahoo Finance on Twitter:
Follow Yahoo Finance on Instagram:
Follow Yahoo Finance Premium on Twitter: …(read more)

BREAKING: Recession News

LEARN MORE ABOUT: Bank Failures

REVEALED: Best Investment During Inflation

HOW TO INVEST IN GOLD: Gold IRA Investing

In times of economic uncertainty, looking for indicators that can predict a recession becomes crucial for investors and policymakers alike. While there are various measures to consider, a new perspective has emerged suggesting that loan growth may be the best indicator of an impending economic downturn. The Chief Investment Officer (CIO) of NewEdge Advisors believes that loans extended by financial institutions can provide valuable insights into the state of the economy.

Traditionally, experts have relied on indicators such as GDP growth, unemployment rates, and consumer spending to forecast a recession. While these indicators have proven to be effective, they often lag behind economic changes and fail to provide real-time analysis. Additionally, they do not specifically highlight the behavior of financial institutions, which play a vital role in the functioning of the economy.

According to the CIO of NewEdge Advisors, loan growth acts as a leading indicator due to its proximity to real-time economic activity. As financial institutions tend to increase lending during robust economic periods, a significant decline in loan growth can signal a potential economic downturn. This decline could indicate a decrease in demand from businesses and individuals for borrowing, reflecting a lack of confidence in future economic prospects.

Moreover, analyzing loan growth provides a comprehensive view of the financial sector’s health, as it encompasses various types of loans, including consumer loans, mortgages, and corporate loans. Examining these different loan categories can help identify specific sectors or industries that may be experiencing difficulties. For example, a decline in corporate loan growth may suggest that businesses are cutting back on investments due to economic uncertainty.

One of the advantages of loan growth as an indicator is that it takes into account the behavior of both borrowers and lenders. When lenders reduce their loan portfolios, it can indicate cautiousness and a perceived increase in credit risks. Conversely, when borrowers reduce their loan applications, it indicates a lack of confidence or a decrease in demand for funds.

The CIO of NewEdge Advisors argues that policymakers should closely monitor loan growth as part of their toolkit to predict and mitigate potential recessions. By doing so, they can anticipate economic downturns earlier and implement appropriate measures to soften the blow. For example, if loan growth starts to decline, central banks may consider implementing monetary policy measures to stimulate lending and revive economic activity.

While loan growth may serve as a reliable leading indicator, it is important to consider it alongside other traditional indicators for a comprehensive analysis of the economy. No single indicator can accurately predict a recession, but combining multiple measures can provide a more robust forecast. Nevertheless, the inclusion of loan growth as a valuable indicator by financial experts highlights the importance of monitoring the behavior of financial institutions and their role in influencing economic trends.