The prospects for recession in developed countries continue to give experts wings for their pessimistic predictions for next year, also in financial markets.
As we explained yesterday, Deutsche Bank (ETR:DBKGn) predicts recession in the United States next year and estimates that markets may fall by as much as 25%.
In fact, according to Alba Puerro, trader and co-founder ofSalaParaTraders, “the US Federal Reserve (Fed) points to the highest probabilities of a recession in the next 12 months with 45% (the highest on record)”.
“If the Fed sees a 45% probability that there will be a recession, the probability is clearly much higher,” adds this analyst.
For his part, Mike Wilson, chief strategist of US equities and chief investment officer ofMorgan Stanley (NYSE):MS), also predicts that stocks will suffer a 2-digit drop in early 2023.
Wilson, whose goal for next year in theS&P 500At 3,900 points, it warns that U.S. companies are preparing to unleash downward revisions to earnings that will hit stocks.
“This is the way. No one cares about what’s going to happen in 12 months. They need to take care of the next three to six months,” Wilson told CNBC on Tuesday. “That’s where we really think there’s a significant drop. So, although 3,900 sounds like six really boring months… It’s not like that, it’s going to be a wild trip,” warns this expert.
Thus, the S&P 500 could fall as much as 24% by early 2023.
“The bear market is not over,” Wilson said. “And we will have significantly lower lows if our earnings forecast is correct.”
Despite this scenario for next year, Wilson believes that “it is not the time to sell everything”, as he still expects some bullish moves to boost stocks during the coming weeks.
