Week 13 (March 24-30, 2025)

The market is signaling an increasing likelihood of a recession. We anticipate a 'mild' recession, though there remains a tail risk of a more severe outcome.

However, in the event of a full recession, there is no fiscal capacity to address it. Thus, the length of the recession and the extent of the decline in real GDP are highly significant. The government will take all necessary measures to prevent a severe recession. A mild recession could lead to lower bond yields and, consequently, reduced mortgage rates, potentially revitalizing the struggling housing market. In the long term, such a recession might even prove beneficial for the economy.

Consumer expectations have reached a level typically associated with recession, and this cannot be disregarded.

OUR TRADES

We anticipate that volatility will remain elevated, which is why we continue to closely monitor the UVIX and hold 50% our position. We secured profits at two price levels, 35 and 36.

Below is an excerpt from our daily newslett…