Equity investors’ anxiety about a potential recession isn’t showing up in other parts of the market, which is giving JPMorgan ChaseUS and European stock markets are pricing in a 70 per cent chance that the economy will slide into recession in the near-term, according to estimates by JPMorgan’s top-ranked strategist.
Recession warnings been bubbling for months this year amid the war in Ukraine, coronavirus lockdowns in China and a more hawkish Federal Reserve. Anxiety that policymakers’ efforts to tame inflation will send the economy into a recession has caused investors to yank almost $US10 trillion off US equity markets this year.
“Either equity markets prove right and a recession takes place, inducing much bigger declines in bond yields, or rate markets prove right and a recession is avoided inducing a recovery in equity markets,” Kolanovic wrote. “Our view remains that the probability of a recession over the next 6-12 months is low and thus stay with a pro risk stance.”
Even as signs the economy is weakening are everywhere, sniffing out evidence an outright recession is on its way is still tough. Manufacturing and services activity is off its peaks but still in expansion. Consumers continue to spend, while employment and housing data doesn’t scream danger.survey, recommended using recent weakness in oil and energy names to add exposure. A steadfast bull on value stocks, he has repeatedly urged investors to buy the dip during the stock-market rout in 2022.
Similarly elevated recession odds have historically pointed to further equity losses when a recession materialises, according to a study by the firm’s strategists led by Keith Parker. But stocks usually rally when the worst doesn’t pan out, with the SP 500 jumping 12 per cent over the ensuing 12 months, they found.
Source: Digital Coin News (digitalcoinnews.net)
Australia Latest News, Australia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Source: FinancialReview - 🏆 2. / 90 Read more »
Source: FinancialReview - 🏆 2. / 90 Read more »
Source: abcnews - 🏆 5. / 83 Read more »
Source: SkyNewsAust - 🏆 7. / 78 Read more »
Source: FinancialReview - 🏆 2. / 90 Read more »
Source: FinancialReview - 🏆 2. / 90 Read more »