Posted on 05/12/2022 12:26:11 PM PDT by RomanSoldier19
Matthew Fox Wed, May 11, 2022, 7:45 AM·3 min read Traders work the floor of the New York Stock Exchange (NYSE) Traders work the floor of the New York Stock Exchange (NYSE)David Dee Delgado/Getty Images An economic recession would send the S&P 500 another 25% lower to 3,000, according to DataTrek Research.
DataTrek believes the Fed is trying to drive a slowdown in job growth to contain rising inflation.
Slowing job growth could cascade into a recession, but for now the S&P 500 is proving resilient.
The stock market could fall another 25% if interest rate hikes from the Federal Reserve spark an economic recession, according to DataTrek Research.
The Fed has a tough balancing act as it attempts to tame rising inflation without sending the economy into a downward spiral. One way the Fed can achieve its goal of a soft landing is by convincing corporate America to slow its hiring frenzy, DataTrek co-founder Nicholas Colas said.
But it is a delicate balancing act. The Fed is looking for just the right amount of job growth to keep the economy humming without contributing to spiking inflation.
That's because since 2020 there has been a strong correlation between job openings and core PCE inflation. "We know that a lot of those JOLTS job postings are to attract people who are already employed. This leads to wage inflation. And that leads to outsized consumer demand, which drives inflation," Colas explained.
"The Fed's goal is to convince corporate America to enact a short-term hiring freeze, and it will keep raising rates and talking about aggressive monetary policy until that happens," Colas said. The Fed has even more reason to keep raising interest rates after Wednesday's CPI report showed inflation remained elevated in April.
(Excerpt) Read more at finance.yahoo.com ...
Stonks? Is that what they are worth now?
thats what the yutes call em
I cracked up laughing the first time I heard “stinks”.
To those who say it always comes back and who say you only lose money if you sell...
You can lose time trying to get back to where you were - having a return of zero until your loss is erased.
This is shaping up to be a 40% loss on the NASDAQ at least. That will require a gain of 67% to get back to even. I would not rule out stocks going down to their long-term support.
Those who sold will bank the returns from the lower starting point when this recovers.
Great chart.
Or rather “Oh $hit”
yes its the end of it all
Enjoy some Steely Dan - Black Friday - https://www.youtube.com/watch?v=h3Pw4t_Falo
It is important to remember that stocks have been been cycling down-/some as much as 75%. Those are probably not looking at another 25%. Unless of course they have no earnings or chance of earnings.
All that has to be done in order to bring newfound prosperity to the market is for me to move my 401K money out of stock mutual funds and park it into the money market mutual fund.
Every single time I do this, the market immediately rockets up and never looks back.
RE” Every single time I do this, the market immediately rockets up and never looks back.” How soon can you do this for us?
I frittered away my 401K. Now I’m looking like a genius.
David Wilkerson, in his book, THE VISION, prophesied this economy would just continue to slide to poverty. The European Union will recovery, but the US won’t.
“ This leads to wage inflation. And that leads to outsized consumer demand, which drives inflation,” Colas explained.”
This person is a complete fool. The inflation we are seeing is not because of wage increases, it is due to huge government spending/stimulus.
The inflation in food/energy/housing all comes back to the administration policies of destroying fossil fuels.
All according to plan.
Ha ha. I should always do the opposite of what I think.
From an economic standpoint, the Fed’s moves, based on the logic of the article, are either moronic or they constitute economic sabotage. We are seeing scarcity driven inflation due to supply chain disruptions caused by governmental interventions in the supply chains overlayed with labor shortages driven by governmental paying of people not to work. Intentionally manufacturing more hiring obstruction exacerbates the inflation by increasing labor scarcity. rather than moderating it. Easing trade restrictions on China will whip saw the US economy by swamping us in cheap China products at a time when American producers are getting hit with record high labor, energy and raw materials artificially manufactured by ill advised Biden energy and domestic raw materials and manufacturing policies. These people are gutting our domestic manufacturing economy and selling us out to China.
“Dow headed down to 30,000, at least, I think.”
If the article is correct and I did my math right 25% would put the Dow down around 8000 points (23730). I am thinking 27K to 28K, if WW3 don’t break out.
“yes its the end of it all”
Hope not. I bought land with cash next door just in case.
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