Axonic Capital on CNBC: Is a Recession Looming?

Aug 15, 2022 | In the News

As most of the major indices continue to experience prolonged losses, it is difficult to look at the drops as anything but a sign of an impending recession in the majority of asset classes. But is a recession really looming? CNBC spoke with Axonic Capital Director of Research Peter Cecchini for insight.

“If you think about what happened in the 1970s relative to the oil shock, which in fact is not within the Fed’s control or anyone else’s for that matter except perhaps Putin’s, we’re likely going to see a more significant drawdown,” says Cecchini. “Along the way, you get some considerable bounces and I actually think we’re in store for one of those.”

Cecchini supports his claim of a likely bounce by the fact that the breadth of both the NYSE and S&P fell considerably a few weeks ago, with only about 20% of the stocks in the S&P above their 50-day average and 20% of the NYSE above their 200-day. “Every time that happens, even in the depths of the sell-off, we tend to get something of a rebound,” he explains. “So, I actually think we are going to see an expansion of breadth on some of the beaten down, value cyclicals. But it’s clearly a sell-the-market rally.”

Fortunately, equities are not the only asset class that investors can depend on to generate returns. For example, at Axonic Capital, we have an interval fund available for investors interested in properly diversifying their portfolios through alternative investments. According to Cecchini, this type of fund “tends to be a very defensive place to be in the kind of economic environment that we foresee.”

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