The U.S. economy is much stronger than people think, and there’s “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’s going to happen next week is just plain wrong,” he told CNBC’s “Squawk Box Asia” on Thursday.
“There’s no data, there’s no evidence, there’s no numbers, there’s no consumer inclination to slow down yet,” he said. .
The O’Shares ETF chairman said he has invested in a wide range of sectors, from commercial kitchens and wireless charging to gym equipment and greeting cards. And he saw “no indication” of a recession.
“I see their tear sheets every week. We don’t see a slowdown yet,” he said, referring to a document summarizing key information about a company. “I think I’ll be one of the first to see it. I’m kind of a canary in the coal mine in that regard.”
He said consumption is still doing well at the moment.
US GDP fell 1.5% in the first quarter of the year despite strong consumer spending due to weak business and personal investment.
There are two reasons why predicting a recession is difficult, O’Leary said.
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 injected into the system, he said.
“I deal with the numbers every week, what the consumer is buying with the money they have, they’ve been given so much in the last three years and I’m not in the camp that says a dramatic recession,” said he added. .
Second, technology has boosted productivity.
The direct-to-consumer model is now used across all sectors of the economy, which means higher gross margins and more customer data for businesses. It’s much more efficient and productive, O’Leary said.
“Those who really say we’re going to have a massive recession could be wrong and miss out on returns as this market slowly comes back,” he said.
“I err on the side of a soft landing in terms of investment strategy,” the “Shark Tank” investor said.
He said everyone thinks the central bank is out of control, but he believes Fed Chairman Jerome Powell is in “pretty good shape” to try to balance inflation and inflation. ‘use.
Even if there are signs of a slowdown or recession, that risk already appears to be priced into stocks given the major corrections in many indexes, O’Leary pointed out.
“Anyone who tells me it’s the end of the free world because we know it’s not looking at data,” he said, adding that some private companies he’s invested in have had “quarters spectacular”.
The economy will slow down at some point, but he says he hasn’t seen it yet.
“I trust the numbers, not the talking heads. I get talking heads all day telling me what they think is going to happen. I look at the numbers. The numbers don’t lie. Cash flow don’t lie. That’s what matters to me,” he said.
“Talking heads make noise. Money is money,” he added.
Not everyone agrees.
Former Fed Governor Robert Heller said the United States was “very close to a recession”, pointing to first-quarter contraction and signs that there will be no second-quarter growth . 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. Any negative influence will actually tip us into a technical recession,” he told CNBC’s “Capital Connection” on Thursday.