The US economy is much stronger than people think, and there is no “evidence” of an impending slowdown or recession right now, says famed investor Kevin O’Leary.
” I’m not saying we won’t, but everyone who says it will happen next week is completely wrong,” he told CNBC’s “Squawk Box Asia” on Thursday.
“There is no data, no evidence, no numbers, and no tendency for consumers to slow down yet,” he said.
The head of the O’Shares ETF said it has invested in a wide range of sectors, from commercial kitchens and wireless charging to gym equipment and greeting cards. He saw “no indication” of a recession.
“I see covers of tears every week. We don’t see a slowdown yet,” he said, referring to a document summarizing key information about the company. “I think I’ll be one of the first to see it. I’m kind of a canary in the coal mine for that matter.”
He said consumption is still doing well for now.
US GDP declined 1.5% in the first quarter of the year despite strong consumer spending due to weak business and personal investment.
O’Leary said there are two reasons why a recession is difficult to predict.
The first is that $4.5 trillion has been added to the US economy in recent years “from a helicopter into the hands of consumers and businesses across the country”.
This is an unprecedented amount of money that has been pumped into the system, he said.
“I deal with the numbers every week, what a consumer buys with the money they have, they’ve gotten a lot in the past three years and I’m not in the camp of saying a dramatic recession,” he added. . .
Second, technology has boosted productivity.
The direct-to-consumer routing model is now used across all sectors of the economy, which means higher gross margins and more customer data for businesses. It’s more efficient and productive, O’Leary said.
“Those who are really saying we’re going to have a massive recession may be wrong and lose returns as this market slowly comes back,” he said.
“I erred on the easy side of the downside in my investment strategy,” said the SharkTank investor.
He said everyone thinks the central bank is out of control, but he thinks Fed Chairman Jerome Powell is in a “very good shape” to try to balance inflation and inflation.
O’Leary noted that even if there are signs of a slowdown or stagnation, those risks appear to have already been priced into equities given major corrections in several indicators.
“Anyone who tells me it’s the end of the free world because we know they don’t look at data,” he said, adding that some of the private companies he’s invested in had “amazing quarters.”
The economy will slow down at some point, but he says he hasn’t seen it yet.
“I trust the numbers, I don’t talk. I talk all day to tell me what they think is going to happen. I look at the numbers. The numbers don’t lie. Cash flow doesn’t lie. That’s what matters to me.,” he said.
“Talking heads are making noises. Money is money,” he added.
Not everyone agrees.
Former Fed Governor Robert Heller said the US is “very close to a recession,” citing contraction in the first quarter and signs that there will be no growth in the second quarter. A recession is defined as two consecutive quarters of decline.
“We’re dangerously close to that because we’re looking at zero growth for the second quarter. The slightest negative impact would actually lead us into a technical recession, he told CNBC’s Capital Connection on Thursday.