On Tuesday, all four major benchmark US stock indexes fell as housing data showed home sales fell 0.7% last month and Russian President Vladimir Putin suspended the arms control treaty. nuclear with the United States. In addition, the chief US equity strategist at Morgan Stanley said the stock market is in a “death zone” and could fall another 26%.
Investor fears of prolonged recession mount, US tensions with Russia further disrupt global markets
Markets were trading lower on Tuesday compared to the previous day as investors were rattled by the current macroeconomic environment. The National Association of Realtors (NAR) published a report on Tuesday, showing the US housing market weakening, with home sales falling 0.7% in January. The price of Gold and silver just like him crypto economy fell, with the latter losing 1.37% in the last 24 hours, up to $1.11 trillion. Stocks followed the same patternwith the four major stock indices (DJI, GSPC, IXIC, RUT) falling between 1.9% and 2.79%.
The NAR report, coupled with continued elevated inflation, has investors concerned that the US Federal Reserve will continue to raise rates, with some thinking it could crush the US economy. In addition, tensions between the United States and Russia rose significantly on Tuesday, and many believe that we are on the verge of a third World war. Russian President Vladimir Putin suspended the New START Nuclear Treaty and put missiles on combat readiness.
Putin said the West was involved in establishing a “despicable method of deception” when the United States and other nations got involved with Syria, Libya and Iraq. “Russia suspends its participation in the new START treaty”, Putin stressed at the national event. The nuclear treaty, signed by former presidents Dmitry Medvedev and Barack Obama in 2010, was aimed at preventing nuclear tests and war. Putin’s speech is not sitting well with global investors, as the conflict between Ukraine and Russia has affected the global economy.
Morgan Stanley Strategist Warns of ‘Death Zone’ for US Stock Market
Furthermore, Morgan Stanley strategists do not believe the US central bank and its chairman, Jerome Powell, will change this year. Morgan Stanley’s chief US equity strategist, Michael Wilson, has warned that the stock market is now in the “death zone.” Wilson explained that the name “death zone” is a common term in mountaineering, where people climbing to extremely high altitudes lose oxygen. Wilson believes that stock markets are in a similar death zone and predicts that the S&P 500 (GSPC) could slide 3,000 points in a short period of time.
“Many deaths in high-altitude mountaineering have been caused by the death zone, either directly by loss of vital functions or indirectly by wrong decisions made under stress or physical debilitation leading to accidents,” Wilson explained in his note. to investors. “This is a perfect analogy for where equity investors are today and, frankly, where they’ve been many times over the past decade.”
Between the rising inflation in the economy, the decline in US real estate, and rising tensions with other nations, the problems in the US continue to escalate. Headwinds from higher interest rates from the Federal Reserve and the rising cost of living for the average American have slowed the country’s growth, with many suspecting it’s due to a long recession. Also, a recent study shows that 55% of Americans believe they will lose everything if there is a recession in the US. Most of those surveyed in the study (three out of four) suspect a recession will hit this year.
What do you think about the current state of the stock market and the growing economic concerns in the United States? Do you agree with the Morgan Stanley strategist’s warning about the ‘death zone’ or do you have a more optimistic outlook on the future of the US economy? Share your thoughts in the comments section below.
image credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or a solicitation of an offer to buy or sell, or a recommendation or endorsement of any product, service or company. bitcoin.com does not provide investment, tax, legal or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
