These parts of the stock market are already priced for recession, Northwestern CIO says
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Brent Schutte, chief investment officer at Northwestern Mutual Wealth Management, says his team is shifting toward cheaper parts of the stock market that could hold up better if the economy sours. The price-to-cash flow ratio for the S & P Small Cap 600 index already looks like it typically does at the end of recessions. Northwestern, which manages more than $280 billion in assets, is broadly underweight equities but overweight small- and mid-cap stocks. Schutte believes these parts of the market are already priced for a recession and will do well when economic headwinds turn to tailwinds. The U.S. economy has defied predictions of a recession, but signs of stress have emerged recently. Schutte believes a bet on small-cap stocks could work even if the Federal Reserve manages a soft landing for the economy.

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https://emeatribune.com/these-parts-of-the-stock-market-are-already-priced-for-recession-northwestern-cio-says/