Cry of recession is coming from big banks around the world
2022.12.09 12:47
Cry of recession is coming from big banks around the world
Budrigannews.com – Top executives from companies like JPMorgan Chase & Co. (NYSE:), are beginning to feel the chill of a looming recession. Walmart, Inc. Inc and Joined Carriers paint a horrid financial picture for the approaching year.
According to the findings of a survey that was conducted on Monday among the most prominent CEOs in the United States by the Business Roundtable, businesses are anticipating a sharp rise in borrowing costs over the next six months, which will result in a decrease in hiring and capital investments.
Through aggressive rate hikes, the Federal Reserve of the United States is relentlessly fighting against inflation, which is at a multi-decade high. This is roiling the economy, forcing businesses to lower their earnings forecasts and reduce expenses.
Jamie Dimon, CEO of JPMorgan Chase & Co., predicted a “mild to hard recession” next year due to a slowing economy and soaring inflation, while Scott Kirby (NYSE:), In their interviews with CNBC this week, his counterpart at United Airlines pointed to plateauing demand for air travel as evidence of “pre-recessionary behavior.”
According to Arthur Hogan, chief market strategist at B. Riley Wealth, “Cautious CEO commentary about the 2023 outlook is logical at this juncture with so much uncertainty around how much the Fed’s battle against inflation will slow the economy.”
In their client notes, some of the largest American banks are already raising concerns about the economy, with some predicting a slowdown and others a complete recession.
Following a rise of 1.9% this year, economists surveyed by Reuters predicted that U.S. growth would slow to 0.3 percent in 2023. Additionally, it suggests a 60% chance of a U.S. recession in the coming year.
NASDAQ: Tesla In October, Inc. CEO Elon Musk predicted that a recession would last until spring 2024.
According to a statement made by Walmart CEO Doug McMillon to CNBC, a downturn might be the unavoidable consequence that is required in order to lessen inflation for his customers, who are more price-conscious.
According to a report in the Wall Street Journal, Pepsi intends to lay off hundreds of employees in headquarter positions. This would place Pepsi on a list of companies, ranging from tech giants to consumer goods companies, that are cutting back on staff to cut costs as they prepare for the uncertain future.
More Financial conditions in US are good
Companies in the United States and the brokerages that cover them are lowering their expectations for profits due to signs of a recession. In the fourth quarter, businesses are likely to see their first decline in earnings in two years.
According to data from Refinitiv IBES, analysts anticipate that profit growth at S&P 500 companies will slow to 4.9% in 2023, following an increase of 5.8% in 2022.
Expectations for an economic recovery are largely dependent on the Fed’s stance on rates, despite the fact that forecasts for the size and timing of the recession vary.
J.P.Morgan Chief Global Markets Strategist Marko Kolanovic stated, “While there is significant uncertainty on the timing and severity of this downturn, we think that financial markets may react sooner and more violently than the economy itself.”
The S&P 500 has fallen about 17% in 2022 as a result of the Fed’s rapid rate hikes. Barring any significant rallies in the three weeks leading up to the new year, the benchmark index is set for its worst year in four years.
Rick Meckler, a partner at Cherry Lane Investments, a family investment office in New Vernon, New Jersey, stated, “Continued cautious comments is leading investors to become skeptical of a full rebound in markets and is part of the reason that recent rallies have failed to gain strong momentum.” Cherry Lane Investments is a family investment office.
