Fastenal Co.’s chief executive officer this month reiterated that the industrial segment of the U.S. economy is in the midst of a recession, while CSX Corp.’s CEO recently said demand will drop amid a “freight recession.”

Determining whether an industrial-led U.S. recession is imminent is “the important question for the year,” Kevin Logan, chief U.S. economist at HSBC Securities USA Inc. in New York, said in an interview on Bloomberg Television on Jan. 15. “There is something to worry about.”

Credit Spreads

The extra yield that investors demand on below-investment grade bonds relative to Treasuries has expanded by 260 basis points in the past year, compared with an increase of 309 points over a comparable period leading up to the 2007 recession, Bank of America Corp. data compiled by Bloomberg show. Spreads last widened this much in 2011, when quarterly GDP growth never went below 1.2 percent.

The carnage in junk bonds has yet to trigger a recession signal, according to UBS AG. The current spreads probably imply a chance of less than 50 percent of that happening, falling short of the threshold that preceded recessions by six to 48 months since the 1960s, Julian Emanuel, executive director of U.S. equity and derivatives strategy wrote in a note Friday.

Even as the likelihood of another recession is debated, there’s been plenty of pain on Wall Street. As a result of the summertime slump in the stock market, Blackstone Group LP in October posted its first quarterly loss since 2011. The world’s largest alternative-asset manager has multi-million share stakes in companies such as Hilton Worldwide Holdings Inc., Zimmer Biomet Holdings Inc. and Brixmor Property Group Inc.

“At a certain point the markets become reality if they affect the behavior of regular people,” Steven Schwarzman, the chief executive officer of Blackstone, said in an interview Wednesday with Bloomberg Television. “And at this point, I don’t think that’s happened. It’s certainly is happening institutionally if you’re managing money and anybody who really touches the stock market can’t be very happy.”

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