Income recession means time to buy stock – Blackstone

This week, Morgan Stanley has issued a warning, predicting that there will be a "widespread recession of profits" in US companies. The chief investment bank's US equity strategist, Michael Wilson, said he was looking for at least two quarters of negative or neutral growth.

He added that the advanced technology sector should be the main drag on profits, as the energy sector also recorded negative growth in sales.

Analysts at Bank of America Merrill Lynch this week reduced their S & P earnings guidance for the year, which was expected to reach 4%, compared with 5% previously.

But a profit recession leads "generally" to a "pretty good" performance for stocks 12 months later, according to Zidle.

"If we get the volatility we expect in the next few months, I think in 12 months the stock will be (will) higher than it is today." That suggests that you buy and that you buy cyclical stocks – the most indebted companies in the global business cycle – because I see improvement, "said Zidle.

According to Zidle, certain cyclical stocks that follow the economic cycle would be those in the energy, technology and industry sectors, which are cheaper than before.

Discussions over a recession have intensified in recent weeks as events in March signaled a risk of economic slowdown. First, long-term US debt yields have fallen short of short-term debt: a so-called yield curve reversal that is widely regarded as one of the most reliable recession indicators.

In addition, weak economic data also fueled fears: manufacturing activity in the euro area fell to its lowest level in more than six years in March. The US Federal Reserve has also taken a decidedly dovish stance and does not expect any further interest rate hikes this year, which justifies its more moderate outlook by reducing growth prospects for 2019 in the United States.

– Patti Domm of CNBC contributed to this report.