JPM: The Worst of the Correction is Likely Over
JPM doesn't think a recession is likely, based on this one indicator.
JPM has had a spotty record in major forecasts for the US stock market for the past 2 years.
But it may be worth listening to what they are saying now.
Strategists Nikolaos Panigirtzoglou and Mika Inkinen say that based on what the credit markets are saying, the worst of the correction might be over.
Small cap stocks, which are more sensitive to domestic growth, are forecasting a 50% chance of a recession. However, if you look at the credit market, it is only forecasting a 9% to 12% chance. In the past, credit markets have been a more reliable indicator.
Just this week, analysts at Goldman Sachs and Citigroup have downgraded their views on US equities.
Portfolio Implications
I am starting to buy small amounts of gold, global stocks and etfs after a cooler than expected US inflation reading.
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