US Markets Fall as Fed and JPMorgan Predict No Recession

S&P 500 lost $850B as JPMorgan denies recession. Wells Fargo predicts US economy’s tough times. Cryptos dip by $20B in total market value this week.

US stock markets are facing a decline after Wall Street experts and the central bank said a recession isn’t likely. Crypto markets are also slowing down today, staying within the same range they’ve been in for months.

On August 16, The Kobeissi Letter, which talks about big-picture economics, said the S&P 500 lost a huge $850 billion in its overall value. This happened in just two weeks after JP Morgan said they didn’t think a recession was coming anymore.

Wall Street Challenges Recession Predictions

“Just 10 days have passed since JP Morgan changed their opinion,” they said, asking if this was a coincidence.

This month, JPMorgan joined other banks on Wall Street, saying that a recession might not happen until 2024. Bank of America also suggested the same thing earlier.

Goldman Sachs, another big bank, said there’s only a 20% chance of a recession in the US in the next year.

Even the Federal Reserve staff predicted a “big slowdown” instead of a recession when they raised rates in July.

The Kobeissi Letter noted, “This almost marked the highest point for the S&P 500 this month.”

S&P 500 1 day. Source: X/@KobeissiLetter

The report noted that while 14 banks are predicting a recession, 6 banks are not. It added, “The number of those who think there will be a ‘soft landing’ has grown in the last few weeks.”

The S&P 500 Index, which shows how well 500 big US companies are doing, reached its highest point in 2023, 4,588, on July 31. After that, it went down by 3.3% to 4,437 on August 15. This was the first time it closed below its average movement over 50 days since March.

Additionally, the Nasdaq 100 Index, which has a lot of tech companies, has fallen by 5% since it hit its highest point in mid-July 2023.

Famous investors like Michael Burry are also negative. He’s the analyst from “The Big Short,” and he bet against the US stock indexes in a huge trade this week.

On August 15, Wells Fargo Investment Institute said the US economy might not be able to avoid a possible recession. They said, “In the end, we think the economy will have trouble avoiding a recession.” They mentioned this could happen because of higher inflation and interest rates that could put more pressure on consumers.

Cryptocurrency Markets Drop

This week, crypto markets are down, but they’re still in the same range they’ve been in for a while.

The total value of all cryptocurrencies combined has gone down by about $20 billion since the week started. Right now, it’s at $1.20 trillion.

Total Crypto Market Cap 7 Day. Source: CoinGecko

Bitcoin and Ethereum went down a bit on Wednesday morning in Asia, but they’re still moving sideways.

Also, other cryptocurrencies (altcoins) are losing more value as the markets turn red again.

Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.

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