American investment bank, JP Morgan warned has warned of substantial market turmoil, as it says the S&P 500 could “easily” lose an additional 20% of its value. The bank also expects to see a recession hit the U.S. early next year with the potential for markets to become disorderly.
Bank CEO Jamie Dimon said, “To guess is hard, be prepared. One guarantee is volatile markets. You are going to have volatile markets. You’ve already seen markets down quite a bit, which is typical but still has been orderly. It’s possible to see it be disorderly sometime in not too near future.”
Dimon cited several areas of concern, including the war in Ukraine, high inflation and the rate hikes being imposed by the Federal Reserve. He says that the central bank acted too long to act and now, we must hope the recession is mild rather than severe. He added, “Rates going up another 100bps will be a lot more painful than the first 100 because people aren’t used to it.”
JP Morgan’s view has been echoed by the International Monetary Fund (IMF) which says it also expects a 2023 recession and has downgraded its global growth forecast.
Earlier this week it warned most countries will feel economic pain. IMF chief economist Pierre Olivier Gourinchas said, “Overall, this year’s shocks will re-open economic wounds that were only partially healed post-pandemic. In short, the worst is yet to come and, for many people, 2023 will feel like a recession. The 2023 slowdown will be broad-based, with countries accounting for about one-third of the global economy poised to contract this year or next. The three largest economies, the United States, China, and the euro area, will continue to stall.”
We know that gold prices thrive in this kind of environment, with chaotic markets, economic contraction and growth fears all increasing safe- haven demand and feeding bullish momentum.
Don’t wait to act. Buy now before prices soar.
