Investors are looking to get back into the markets this year according to a range of industry data from brokers and clearinghouses. But they will have to contend with a key market signal that is screaming "recession ahead!"
Specifically, the spread between the yield on the 2-yr treasury note and the yield on the 10-year treasury note - also often called "the 2-10 curve' - is now deeply negative. At -0.86%, this spread is at its lowest level in over 40 years.
Every time we have seen this spread turn negative in that time, recession has quickly followed. It is telling us that short-end interest rates are too high to support sustained economic growth. In most cases, it would be telling the Fed to start cutting rates to brace for the slowdown. However, this time around, inflation is too high to allow that adjustment.
As a result, most major
But that doesn't mean investors have nowhere to turn for growth and returns. It just means you have to be selective.
One area of the market that generally cruises through recessions is the so-called "sin" sector, which includes alcohol, cigarettes, and gambling. During the good times and the bad, people keep paying for their sins.
To reframe the situation, these are staples, not cyclicals. People cut back on fancy new hi-tech gadgets and expensive vacations long before they cut back on beer and toilet paper.
But that doesn't mean you have to sacrifice growth to get this recession-proof quality. In fact, there are plenty of small-cap growth names that fit the bill.
One good example of threading this needle is
Opening KEGS
According to company materials, KEGS looks to build a network wherein certain economies of scale can be shared across it such as production, distribution footprint expansion, inter-member contract brewing, new product development, sharing of best brewery practices, and scale logistics and transportation.
The network is to be built through investment by
The company produces award-winning beers such as War of 1812 Amber Ale, 1812 Light, Hazy Oasis Pale Ale, Thousand Islands IPA, Malicious Intent IPA, Route 11 Lager, Railroad Red Ale, Helles Bells Pilsner,
We should also point out that it looks to be expanding into
The Company's proximity to the Province of
The Path Ahead
KEGS just put out a key shareholder update that gives us plenty of insight into where this story is headed.
According to the update,
Management also noted that this acquisition - if transacted - would be potentially transformational for
The update also noted that 1812's flagship product continues to be sold on TapRm.com's website direct-to-consumers in 45 states plus
On each level, KEGS would appear to be a story in its early innings that is positioned for recession-proof growth.
Media Contact
Company
Contact Person: Tom
Email: Tom@1812ale.com
Country:
Website: www.1812ale.comun
Source: www.abnewswire.com
.
(C) 2023 M2 COMMUNICATIONS, source