3 market problems

Phew! Hey readers — I'm Phil Rosen. I'm still in shock after last night's episode of Succession — no spoilers, but dang(!). Talk about drama.?

Today we're diving into how a recession could affect the stock market — and why it may not be all bad in the eyes of investors.

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1. Markets so far this year haven't acted like they're too concerned about a recession, and that's no accident, according to DataTrek Research.?

Any turbulence at this point is to be expected, since classic signals — like the inverted yield curve — have been blaring for some time now. We're riding the track toward the most-forecasted recession in history.?

But Nicholas Colas, the cofounder of DataTrek, said a downturn would actually remedy the "three most intractable problems" that have been ailing stocks coming out of the pandemic:?

• High inflation: Sticky, high prices have weighed on stocks, but a slowdown would alleviate this.
• Aggressive Fed rate hikes: Stocks could begin to look attractive again once policy loosens up, since bonds have been the more popular choice of late, relative to equities.
• Falling productivity in the labor market: A recession could stop companies from hoarding workers, which could improve profit margins.

To Colas, markets are effectively embracing the possibility of an economic contraction. In his words:

"Markets see a recession as a 'feature,' not a bug."?

How are you positioning your portfolio for the year ahead? Let me know in the comments.

In other news:

2. We spoke to four tech fund managers about how to invest in artificial intelligence. Wall Street's been paying a lot of attention to the nascent space since ChatGPT burst onto the scene in November — and these experts broke down where to park your cash without getting sucked into the hype.

3. Russia minted 22 new billionaires last year. That happened even as the West imposed sanctions on the country to try and cripple its financial system. In total, there are now 105 Russian billionaires — and their combined net worth has jumped to $474 billion.

4. Real-estate agents are about to get slammed. There are now two agents for every home for sale. That means many of them won't survive the housing crunch's deal slowdown.

5. Tesla stock could soar to $2,000 a share in five years. At least that's what Ark Invest's Cathie Wood thinks. She anticipates that a robo-taxi boom will power Elon Musk's company to historic highs.

This is a condensed version of Insider’s 10 Things Before the Opening Bell newsletter. To see items 6-10, sign up here to?receive the full newsletter in your inbox.

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This newsletter was curated by Max Adams.