As stocks continue their rally, several major financial institutions are now predicting a significant downturn in global markets. The S & P 500 index has risen by more than 10% since its lows in October last year. In Europe, the STOXX 600 has increased by more than 15% over the same period. But, according to some investment banks, those gains are now at risk as they fear the lagged effects of monetary tightening are likely to hit earnings and cause compression in profit margins this year. .
24 UBS: STOXX 600 down 8% to 410 by Dec. The Swiss bank also sees potential for an 8% decline to 410 due to declining earnings/margin expectations. We think the market significantly underprices downside risks. With yields and global growth risks expected to remain elevated for most of this year, we don't expect a material valuation rebound beyond what we have already seen this year. - Jan. 11 JP Morgan: STOXX 600 up 3% to 465 by Dec. The American investment bank has a more mixed outlook.
CNBC seems to be rooting for a recession despite all evidence pointing in the other direction
Thanks I’ll sell everything first thing tomorrow morning