Outlook for market isn’t bright even if we dodge a recession, says Goldman Sachs
Author of the article:
Bloomberg News
Rita Nazareth
The outlook for U.S. stocks isn’t particularly bright, even if an outright recession is avoided, according to Goldman Sachs Group Inc. strategists. Photo by REUTERS/Lucas Jackson/File Photo Stocks dropped amid concern over how much the Federal Reserve will have to boost rates to tame decades-high inflation without throwing the economy into a recession.
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Wall Street’s major indexes opened lower on Monday as rising U.S. Treasury yields amid prospects of aggressive monetary policy tightening weighed on growth stocks, with the sentiment taking a hit from fears of an economic slowdown in China.
The Dow Jones Industrial Average fell 504.51 points at the open to 32,394.86. The S&P 500 fell 77.97 points at the open to 40845.37, while the Nasdaq Composite dropped 252.95 points to 11,891.71 at the opening bell. The TSX was down 394.55 to 20,238.74.
Traders will be closely watching a host of central bank speakers this week after Chair Jerome Powell on Wednesday played down the option of a 75 basis-point rate hike. Federal Reserve Bank of Atlanta President Raphael Bostic told Bloomberg Television he favours policy makers continuing to raise rates by half-point increments rather than doing anything larger. Meantime, his Minneapolis counterpart Neel Kashkari said he’s confident officials will bring inflation down.
More On This Topic Welcome to The Upside Down market, where strange things are the norm Vicious stock reversal is a symptom of the Fed’s feedback problem Martin Pelletier: Two common mistakes that can cost investors in these volatile times The outlook for U.S. stocks isn’t particularly bright, even if an outright recession is avoided, according to Goldman Sachs Group Inc. strategists. The S&P 500 has fallen about 15 per cent this year as high inflation readings, a slowing economy and aggressive tightening by the Fed have weighed on risk appetite and valuations.
Bloomberg.com
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