FX: Economists predict a 180-degree shift! This rare signal from the market cannot be ignored

Top economists' forecasts for the U.S. economy have undergone a 180-degree turnaround.Most people now doubt whether there will be a recession next year.

According to a survey by the National Association for Business Economics (NABE),71% of economists believe that the probability of a recession in the next 12 months is 50% or less.A significant proportion of them are particularly optimistic, with a quarter putting the probability of a recession at 25% or less.

That is a big shift from a few months ago, when economists were roughly evenly divided in their expectations for recession or no recession in April. A March NABE survey showed that 58 per cent thought the US was either already in recession or would fall into one sometime in 2023.

The shift in market sentiment stems from positive sentiment in the broader economy, as recent indicators show resilience and inflation trends are fading.

Julia Coronado, president of NABE and founder and president of Macro Strategic Vision, said "the results of the July 2023 NABE Business Conditions Survey reflect rising sales and profits in the US economy as material costs fall and wages stabilise, reducing the challenges facing the economy".

Since 202,Most people said for the first time that their company's salaries remained stable in the second quarterMeanwhile, the proportion of businesses reporting wage increases fell to 47% from 63% in the April survey

The NABE numbers come as others express similar optimism. Steve Eisman, the "big short" investor, recently said,There is no sign that the economy will declineNobel laureate economist Paul Krugman says a soft landing is just around the corner.

The optimism is echoed in US stocks, where the Dow Jones index has enjoyed its longest streak of gains since 2017.The index closed higher for the 12th consecutive day, the first time since February 2017.

The Dow has rallied 5.2 percent since the streak began on July 10 as investors profited from a string of strong earnings reports and continued to push artificial intelligence-related tech stocks like Microsoft and Salesforce higher.

Ryan Detrick, chief marketing strategist at Carson Group, said:The Dow's strong performance tells investors two things: one is that the stock market is likely to rise further, and the other is that there is no sign of a recession.

He carefully analyzed the data and found that since World War II, the Dow Jones index has risen for 11 consecutive days only five times, and the forward-looking returns have been overwhelmingly positive.

According to the historical "playbook", after three months of the Dow's 11-day run, blue chips will rise, with an average gain of 5%. After six months, they will also rise, with an average gain of 11%. After 12 months, there are four rises, with an average gain of just over 8%.

The only time the Dow did not achieve a higher gain a year later was in 1987, when the Dow closed lower due to the "Black Monday" crash, which saw the index plunge 23% on October 19, 1987.

In addition to that,According to Detrick's analysis, the stock market is likely to continue to rise, which bodes well for the overall U.S. economy"The most important thing is that when that happens, you don't see a recession or a bear market," he said on Tuesday.

Mr. Detrick also cited rising house prices and rising consumer confidence. "There will be no recession," he said of the figures.

FXTForex investment will always keep an eye on market fluctuations to give investors risk notice.