A recession lies 'not too far away' for the US: Strategist

While stocks (^DJI, ^IXIC, ^GSPC) are bouncing back after a three-day sell-off, Rosenberg Research founder and president David Rosenberg believes it is just a "brief countertrend" amid a larger sell-off. He joins Market Domination to lay out this case and whether the US economy is on the brink of a recession.
Rosenberg calls the movement "purely" algorithm trading and an oversized reaction to the sell-off in the days prior. He adds that the market "has become unhinged" over the last week as volatility has exploded. He notes that today's rebound is expected, saying, "You would get a technical bounce off the oversold levels that we had." However, he cautions against believing that the market is now out of the woods.
He adds that a recession "is not too far away," highlighting the weak jobs report in July that triggered a lot of the market action on Friday. "You're looking at the whole gamut of employment indicators. You look at nonfarm payrolls, you look at the household survey, you look at the JOLTS (Jobs Openings and Labor Turnover Survey), look at the jobless claims and what's happening to the backlog of continuing claims, and you could see that cracks are starting to emerge in the labor market," he explains.
"The fact that we don't have any more fiscal stimulus, that the household savings file from the prior pandemic stimulus has run dry, and now you talk about a cooling in the labor market, but the household survey is actually flat year over year. And in the past, going back to 1950, when you flatten out on the household survey, you're either heading into recession, already in one, or crawling out of one."
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