Executives talking about recession nearly as much as in April 2020

As fears of a recession mount, US executives are increasingly addressing the topic on their conference calls with investors and analysts.

The number of mentions of the word ‘recession’ on earnings transcripts has risen sharply and is close to levels last seen in April 2020, at the height of panic over the Covid-19 outbreak, according to data from Sentieo, a market intelligence firm.

Nick Mazing, director of research at Sentieo, says datasets looking at both corporate and individual activity are ‘concerning’. He notes that inventory levels at retailers are high, which could indicate that consumers are worried, while Google searches for the word ‘recession’ have spiked, just as they did in the early stages of the Covid-19 outbreak.

With fears of recession playing on investors’ minds, Mazing suggests companies take a leaf from the Covid-19 playbook, where they were ‘much more forthcoming with information and the direct steps they were taking’.

He adds that some companies may be able to position themselves as beneficiaries of trends playing out in the market: ‘[Rising] rates may be bad for housing and mortgage origination but, if we look at financial institutions, if the assets are getting repriced at a faster rate than the liabilities are, they are actually in a good position.’

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