A slowdown in the market should not make investors immediately duck and cover in fear of a recession.
Heading into the end of 2018, much of the market remained concerned about an encroaching bear market ready to tear gains apart and a tightening fed was doomed to send the markets into a spiral.
However, after a more dovish fed has appeared to kick off the year, jobs numbers continue to come out gangbusters, and a resolution to the Sino-American trade war is appearing more and more probable, many market watchers are wondering: Where is the catalyst?
"In today's market, euphoria we do not have," Neil Hennessy told Real money's Kevin Curran in an interview. "We have more people coming into the workforce. If people have jobs, they'll spend, they'll invest and they'll save and that's all good for the economy."
His sentiment echoes that of Allianz chief economic adviser Mohamed El-Erian, who warned against reading too much into periodic market slumps as indicators of impending recession on CNBC Tuesday. He highlighted the financial crisis in particular as an instance of an obvious underlying culprit for collapse, ie. subprime mortgages and over-levered banks.
For a historical rundown of bubble bursts and what to watch for as real indicators, as well as some stock picks Hennessy is making in his flagship mid-cap portfolio (HFMDX - Get Report) as he looks to play continued consumer strength in 2019, check out the full interview above.