At present, the US economy is in a technical recession, but the US economy is still some way from the real recession. Some of the US economic indicators have weakened, but most of them remain strong.In the first and second quarters of 2022, the annualized GDP of the United States was negative for two consecutive quarters, at-1.6% and-0.9%, respectively, and fell into a technical recession. But most of the indicators that NBER cares about remain strong, such as June's real personal income minus June transfer payments of $14.47 trillion, compared with a previous value of $14.51 trillion, down slightly from a month earlier but still high. After the quarterly adjustment in July, the number of non-farm payrolls increased by 528000, far higher than the expected 250000. In terms of unemployment, the United States remains at a low level of 3.5% after the epidemic, down from 3.6% in June and the same as the low level before the epidemic.

The drag on GDP from inventory investment is likely to increase.At present, the year-on-year growth rate of private inventory is gradually rising, while the overall year-on-year growth rate of sales declines, and the US inventory cycle may enter a historical inflection point. Since the second half of 2021, US private inventory has increased significantly, with total inventory growth from 6.32% in June 2021 to 17.71% in May 2022. However, commodity consumption cooled in the first and second quarter of 2022, and sales showed a fluctuating decline compared with the same period last year. The March moving average growth rate of total sales fell from 16.66% in December 2021 to 14.05% in May 2022. The inventory cycle in the United States may enter a historical inflection point. From a historical trend, the year-on-year trend of inventory generally lags behind sales by about 3-6 months.

We have the following view on the future trend of US stocks: the recent rebound in US stocks stems from the expectation that after the Fed raises interest rates sharply from June to July, it may slow the pace of interest rate hikes because of increased recession risks and marginal easing in inflation. as a result, the suppression of interest rates on the stock market has been weakened, and there has been a period of valuation repair for US stocks.But recent US non-farm data are stronger than expected and the unemployment rate remains at an all-time low, which may reverse the pace of the Fed's turnaround expected by the market, and the possibility of the Fed raising interest rates by 75bps in September will rise.According to the historical experience of the reversal of the US bond yield curve and the implicit pace of interest rate increases in CME data, this paper believes that a real recession in the US economy is likely to occur in the first half of next year. Although the current downward revision of US stock earnings is still small, with the passage of time, if the risk of recession continues to increase before the Federal Reserve interest rate cut cycle, US stocks may be adjusted again because of earnings downward revision.

Us stock recommendation:$Ferrari (RACE.US) $、$Lululemon Athletica (LULU.US) $。

Risk Tips:The global COVID-19 epidemic repeatedly exceeded expectations; the risk of recession in the United States exceeded expectations; the Federal Reserve's monetary policy changed more than expected; US stocks fluctuated more than expected; and the international geopolitical situation changed more than expected.