The stock market is setting a price within 70% probability of a ‘near-term’ recession, JP

If you’re convinced that the price in the stock market is true, then the latest research from the street is worth watching.

In a research note on Wednesday, JP Morgan strategist Marco Kolanovic said, “We estimate that equity markets in the United States and the eurozone are setting a price within a 70% probability of a near-term recession.”

Kolanovic’s study found that companies like Goldman Sachs predicted a 35% chance of a recession in two years. Deutsche Bank is the only Wall Street investment bank to forecast a recession next year.

At the same time, Kolanovich – a long-term market bull – says the market can set prices in too much negativity.

“We are also skeptical of the notion that April’s equity fund outflows, the highest since March 2020, are just the beginning of a longer period of outflows,” Kolanovic said, adding that investors should buy dips in oil and oil-related stocks. . “So we maintain a risky position.”

Signs of slowing growth are now everywhere.

Big discount retailers Walmart and Target have reported massive first-quarter earnings missed this week on the back of inflation. Both companies have warned of full-year profits, despite ongoing supply chain inflation and increased surveillance prices to offset more cautious buyers.

Brian Cornell, chairman and CEO of Target, told Yahoo Finance, “We never expected the kind of increase in freight and transportation we see right now.”

Bull's Eye the Dog, Target Chain Store's Mascot, reached the red carpet at the 2008 Billboard Latin Music Awards on April 10, 2008 in Hollywood, Florida.  REUTERS / Carlos Barria (United States)

Bulls I the Dog arrives on the red carpet at the 2008 Billboard Latin Music Awards in Target Chain Store’s mascot, Hollywood, Florida, April 10, 2008. REUTERS / Carlos Barria (United States)

According to Yahoo Finance Plus data, the combined market cap of Target and Walmart has dropped by more than $ 65 billion in the last two days due to their worrying comments.

Meanwhile, market sell-offs on Big-Cap technical names have been most intense as traders have become more concerned about pricing.

All five components of the closely watched FAANG (Facebook, Apple, Amazon, Netflix, and Google) complex have lost more than 18% year-over-year, leading to a nearly 70% crash for Netflix.

Institutional investors have never been more bearish about the technology sector, according to a new Bank of America survey.

Brian Suzy A great editor and Yahoo is anchored in finance. Follow Suzy on Twitter @ Briansoji And then LinkedIn.

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