These stocks -- the 'beating heart' of the economy -- are in trouble, says strategist

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These stocks -- the 'beating heart' of the economy -- are in trouble, says strategist
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Updating his 'maddest macro chart,' Société Générale strategist says 'beneath the megacaps, the vast bulk of companies are in big trouble.'

At last, it’s time to send August packing — take your heat waves and miserable summer weather and begone.

As he explained in July, those profits have delayed a U.S. recession because companies have largely been net beneficiary of higher rates. Corporates borrowed long-term at 2020 and 2021’s low rates, then lent money back via Treasury bills and other vehicles at higher short-term rates. With that, he walks back his July conclusion that the U.S. is “practically immune from rising rates. Large and megacaps might be immune, but the explosion higher in corporate bankruptcies is sending a clear message,” he says.

The markets Stocks DJIA SPX COMP have opened slightly higher, post data. The 10-year Treasury yield BX:TMUBMUSD10Y is steady at 4.108%. China stocks XX:000300 slipped on data showing another contraction in manufacturing activity. Salesforce shares CRM, +5.29% are up over 5% after the software giant delivered a strong outlook and improved margins. Okta OKTA, +15.51% is up more than 10% after the ID-management software group lifted its annual earnings outlook. Five Below FIVE, -2.69% stock is off nearly 7% after the retailer said it would tweak guidance to account for bigger-than-expected “shrink.”

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