Corporate Insiders Are Selling Like Crazy | Jesse Felder

Portending an earnings recession is likely within the next 12-18 months

There's a lot of change in the air right now: in the economy, the markets, and of course with the fast-approaching US election.

There's so much change currently underway that today's guest titled his latest report: The Macro Winds Are Shifting.

How exactly? What will the likely repercussions be?

And how should investors consider positioning intelligently today for where the puck is headed?

For guidance, we're fortunate to speak today with Jesse Felder, founder & Editor of the respected market research firm: The Felder Report.

In particular, Jesse is fixated on the Corporate Insiders Sell-To-Buy Ratio, which is near all-time highs. Historically, a level like that has been followed by an earnings recession within the next 12-18 months.

To hear Jesse’s outlook, click here or on the video below:

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Adam’s Notes: Jesse Felder (recorded 9.17.24)

EXECUTIVE SUMMARY:

• Jesse echoes Bill Dudley’s assessment that the U.S. labor market is nearing or has crossed a critical tipping point. August job cuts reached the highest level since 2009, and job hires were at a 20-year low. The Challenger report showed significant job losses and hiring slowdowns, suggesting a weakening labor market, which could accelerate economic contraction.

• Jesse expresses doubts about the market’s assumption of a soft landing. Defensive sectors like utilities, consumer staples (e.g., Walmart and Costco), and gold are outperforming high-growth tech stocks like those in the Nasdaq. This rotation into defensives is a strong market signal that investors are preparing for economic weakness or a possible recession.

• The insider sell-to-buy ratio recently surged above 25, meaning corporate executives are selling $25 in stock for every $1 they buy. This indicator, which has a strong historical correlation to economic downturns and earnings recessions, last peaked in late 2021, signaling the 2022 bear market. Jesse suggests this is a powerful early warning that