The recession has become a real thing and could lead to a sell-off in stocks and panic in the credit markets on Wall Street. The CEO of JPMorgan ChaseJamie Dimondwarned of a probable recession in the US between 6 to 9 months according to Joshua Franklin in Financial Times.
Dimon predicted that the US economy probably going into recession next yearand warned that the recession threatened to cause “panic” in the credit markets Y remove an additional 20% of the value of US stocks.
The comments from Dimon, whose economic pronouncements are closely watched by investors, followed similar comments last month by of billionaire investor Ken Griffin and point to a growing consensus among leading Wall Street figures that a US recession is likely.
In an interview with CNBC on Monday, Dimon listed the rising interest rates and Russia’s invasion of Ukraine as factors that feed the risk of a recession in 2023.
“These are very, very serious things, which I think are likely to push the US and the world, I mean, Europe is already in a recession, and they are likely to put the US now,” Dimon said.
Dimon noted that first signs of distress were evident in the financial systemwhich points to the depressed market for Initial public offerings and high yield debt dealsand predicted that the pain would soon spread to other areas.
“The likely place where you’ll see more cracking and maybe a little more panic is in the credit markets,” Dimon added.
In June, Dimon had warned of a economic “hurricane” and on Monday he again encouraged investors to be “very, very cautious.” And I add: “If you need money, go get it.”
Asked where he saw the low point for the benchmark S&P 500 stock index, which is down more than 20% this year, Dimon said he can still “have a long way to go” Y “could be another 20% easy.”
“I think the next 20% will be much more painful than the first. Rates that go up another 100 basis points are much more painful than the first 100 because people are not used to it,” Dimon said.
JPMorgan, the largest US bank by assets, will report your earnings on Friday. Analysts predict that, like the other big banks, set aside more than $4 billion to cover potential bad loan lossesin a sign of the growing pessimism surrounding the US economy.
JPMorgan Chase It closed on Monday at $105.02 and the 70-period moving average remains above the latest candles. Meanwhile, the Ei indicators are practically bearish.