PROOF - A recession is just around the corner

I wish I had better news.

Last Wednesday, the United States Bureau of Economic Analysis reported Gross Domestic Product (GDP) numbers, and they were BAD.

GDP is what we use to measure our economy.

Usually, GDP rises.

But GDP for the first quarter of 2025 actually shrank 0.3%!

Not a huge drop, but our economy should be growing instead of falling.

Economists expected GDP to grow 0.4%, so while GDP growth was supposed to slow it wasn’t supposed to go negative.

Here’s more information about the drop in first-quarter GDP.

What caused the drop?

The biggest reason for the drop in GDP was from a huge growth in imports.

Seems unexpected, since the Trump administration is trying to reverse our trade imbalance.

But it makes sense when you think about it.

Companies stocked up on tons of products and materials from other countries before Trump’s tariffs took effect.

Why? Because those foreign products and materials were going to get a lot more expensive after the tariffs went into effect.

With the 90-day pushback on many of those tariffs, companies may still be stockpiling through the second quarter as well.

And if companies cut back on importing products from other countries it isn’t necessarily good news either.

Container shipping at the Port of Los Angeles, the largest non-Asian port in the world, is down 35% compared to last year.

A drop in international shipping will have a ripple effect throughout other sectors like transportation and retail, which are vital to our economy.

Shaky economic news must mean the markets were in turmoil, right?

Actually, the opposite happened!

The S&P 500 rose for 9 consecutive trading days.

It’s the longest winning streak for the S&P 500 since 2004.

The index was up almost 9% over those 9 days.

The stock market seems very irrational at the moment so we need to be prepared.

I believe a recession is just around the corner… once it hits, we’ll see the markets fall. These are the stocks to own to keep our portfolios afloat:

Wal-Mart (ticker: WMT) is the largest retailer in the United States. Usually retailers should be avoided in an economic downturn, but Wal-Mart is positioned as the name-brand discount store in the marketplace. When the recession hits, shoppers will flock to Wal-Mart looking for cheaper products.

Southern (ticker: SO) is the second-largest utility company in the United States, with operations all over the Southeast. In a recession, electricity is one of the last things consumers cut so Southern shouldn’t have any disruption to their business.

Waste Management (ticker: WM) is the largest waste management company in the United States. Taking out the trash certainly doesn’t sound very exciting, but if trash collection takes a hit during a recession then we have bigger problems!

What investments are you making to prepare for the coming recession?