Opening Bell: Big stock drop off

Welcome back, readers. Phil Rosen here, I’m on my way to Times Square, where NFT.NYC is about to kick off — keep an eye out for dispatches from the conference this week. 

Ahead of the summit, I sat down with the founder of the ‘Coachella of NFTs’ and asked him what’s to come.

But stock market investors are in no mood for monkey business today. Top analysts see another dramatic drop-off looming after last week’s Fed rate hike.

Let’s break it down. 

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1. A nightmare scenario for the stock market could be brewing, and the Fed’s rate hikes have increased the likelihood of a prolonged recession, according to Axonic Capital’s top hedge fund strategist. 

“The 1970s’ drawdown scenario of almost 50% for the S&P 500 is becoming all the more likely,” the strategist said. Cutting the index’s January high in half would send it to 2,400, about 30% lower than the current levels. 

Richard Sapertein, chief investment officer at a $9 billion money manager, agreed that there’s plenty of room left to fall for stocks. 

The massive uncertainty and volatility mean we haven’t seen the bottom yet, and the Fed’s quantitative tightening could drag shares even lower. In his view, investors shouldn’t be rushing into stocks right now. 

As if those forecasts weren’t enough, JPMorgan analysts said the stock market is currently pricing in an 85% chance of a recession. Gloomy talk of economic turmoil can have its own influence on market moves. 

“Whether one looks at web searches or market pricing there appears to be heightened concern about the prospect of a US recession which by itself has the potential to become self-fulfilling,” JPMorgan said.

Throughout the past couple of decades, there have …read more

Source:: Businessinsider

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