Anatomy of a Recession: Two Macro Economic Risks Fading

Jeff Schulze of ClearBridge Investments gives a constructive outlook for the US economy and puts the odds of recession in the next 12 months at 20%. He discusses inflation implications from June's jobs report and falling oil prices, shifting stock-bond correlations and elevated S&P 500 valuations supported by strong earnings. He also addresses potential volatility in a midterm election year while saying the fundamental backdrop remains supportive for equities in the second half of 2026.

1. Schulze puts the odds of a US recession in the next 12 months at 20%.
2. He discusses potential inflation implications of June's jobs report and falling oil prices.
3. He examines shifting stock-bond correlations.
4. He argues current S&P 500 valuations, while elevated, are supported by strong earnings.