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"If it’s not already underway, Colvin argues that a US-led recession will arrive in the first half of 2023. That is far earlier than the current consensus of Q4, and certainly what equity markets are not prepared for in their view.

The crux of this base case is in the timing, which in turn is supported by the economic data.

       'Year one is an initial unwinding of the excessive bubble like valuations in parts of the equity                market,' Colvin says

The best way to see how that unwind worked out, apart from the equity market’s obvious falls, is in the bond market where US Treasury yields (nominal and inflation-protected) both surged to above 4%.

That’s what the professionals call a “taper tantrum”, sparked by the data and spurred on by central bank rate hikes which caused investors to sell almost everything. Those rate hikes are what the Longview team calls the “policy normalisation” phase - an era that ended when equity risk premia fell back to long-term averages."

So what will happen this year?

'Year two [2023] is the pricing of recession and rotation amongst key areas/sectors of the equity market,” Colvin argues.”We’re into chapter two of this bear market and there is no soft landing coming'..."









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