r/wallstreetbets
Europe Is Too Scared to Grow, So Their Money Keeps Buying My SPY Calls
Author buys SPY calls betting on US economic resilience and strong job growth outperforming Europe, despite rising inflation.
- US economy is resilient and unlikely to enter a recession soon due to strong job growth.
- American culture is more solutions-oriented and willing to take risks compared to risk-averse Europe.
- US labor market continues to add jobs, smashing expectations with 172k in May.
- Consumer prices are rising at their fastest pace in three years (4.2% in May), threatening economic resilience.
- High inequality and housing crises could eventually lead to a tipping point and a real jobs crisis.
https://www.bbc.com/news/articles/cwy031el03po
This is why the US economy wont be in recession any time soon- From the article:
Americans are very solutions-oriented and much more comfortable with taking a short-term risk in service of a long-term advantage. Europe as a culture is risk-averse.
The US is a land of very high inequality," she says. "If you're struggling, you are really going to have a hard time because the labour market is not adding piles of new jobs, things are getting more expensive, many cities have housing crises."
Her deeper worry is that inequality hits a tipping point. "Even then having the dollar and fairly stable banks won't help if you have a real jobs crisis in the real economy."
So far, there is little evidence of that. In fact, American employers added 172,000 jobs in May, smashing expectations.
But new inflation data this week, showing consumer prices rising at their fastest pace in three years, suggests the limits of America's resilience may be approaching. Prices in May were 4.2% higher than a year earlier, up from 3.8% in April.