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Market News A summary of institutions' views on financial markets on May 19
A summary of institutions' views on financial markets on May 19
On May 19, institutions summarized their views on the stock market, commodities, foreign exchange and the central bank's policy outlook.
2022-05-19
12441
On May 19, institutions summarized their views on the stock market, commodities, foreign exchange and the central bank's policy outlook.
1. S&P: U.S. economic growth is expected to fall by 80 basis points to 2.4%
2. Wells Fargo: The U.S. economy is expected to experience a mild recession in late 2022 and early 2023
3. JPMorgan Chase: dragged down by factors such as the decline in the stock market, the US GDP forecast was lowered;
Falling stock prices, rising mortgage rates and a stronger dollar relative to trading partners will weigh on the economic outlook, lowering forecasts for the U.S. economy this year and next. The economic growth forecast for the second half of 2022 was lowered to 2.4% from 3%, the first half of 2023 forecast was lowered from 2.1% to 1.5%, and the second half of 2023 forecast was lowered from 1.4% to 1%. This will lead to a U.S. unemployment rate of 3.5% in the second half of 2023, compared with an earlier forecast of 3.2%. The Fed is stepping up its efforts to implement the required tightening measures in financial conditions, giving us some confidence that GDP growth will slip below potential in the coming quarters
4. A recession has become the base forecast scenario, and Wells Fargo has lowered its S&P 500 target twice in three weeks;
Wells Fargo lowered its forecast for the S&P 500 for the second time in three weeks, saying a mild recession is now its base case. Wells Fargo's consulting arm cut its year-end target for the S&P 500 by 300 points on Wednesday, after a 200-point cut in late April. The index is now expected to be in the 4200-4400 range before Christmas, implying a decline of as much as 7.7% for the year, but a gain of as much as 12% from current levels. "Since the beginning of the year, we've noticed a rising recession risk," Wells Fargo's advisory strategists wrote in a note to clients. We weighed the latest monthly and weekly data and the economy has crossed a probability level, making a mild and short recession our base case
5. Oanda: U.S. bond yields peaking may be good for gold;
Ed Moya, senior market analyst at Oanda: With the strong risk-off sentiment driving the dollar higher, some investors appear to be looking at gold as a safe-haven asset again. U.S. Treasury yields appear to have peaked, which could be good news for gold
6. High Ridge Futures: Gold prices are expected to gain support;
Another big sell-off in U.S. stocks, coupled with lower yields and safe-haven buying, is driving gold higher, said David Meger, head of metals trading at High Ridge Futures. The real question and sticking point is whether the Fed is doing enough, given the level of inflation. If this is not enough to quell inflationary pressures, gold will find support in this environment
7. JPMorgan Chase lowered its U.S. economic growth forecast;
JPMorgan lowered its forecast for real GDP growth in the second half of 2023 from 3% to 2.4%, lowered its forecast for real GDP growth in the first half of 2023 from 2.1% to 1.5%, and lowered its forecast for real GDP in the second half of 2023 from 1.4% to 1.5%. 1%
8. Morgan Stanley: Ukraine's GDP will decline;
Ukraine's 39% GDP contraction in 2022 is normal, Morgan Stanley says
Morgan Stanley also said Ukraine would lose access to the Black Sea if "there is no clear solution" to the Russian-Ukrainian conflict. In worst-case scenario, Ukraine's GDP will fall by 60% in 2022
9. Morgan Stanley: Geopolitical uncertainty supports the dollar stronger than expected;
Matthew Hornbach, global head of macro strategy at Morgan Stanley: We had expected the dollar to continue to strengthen in 1H22 as rising U.S. real yields and the Fed's hawkish stance would drive the 'policy divergence' narrative. Market expectations for the Fed are certainly headed in this direction, but the outlook for global growth has been surprisingly weak, and geopolitical uncertainty has been more supportive for the dollar than expected.
10. Rabobank: India may still export wheat, but the way of trade may change;
India recently announced a ban on wheat exports, but Egypt can still purchase wheat from India, suggesting that the export ban may not be as severe as the market imagines. Rabobank analyst Dennis Voznesenski said that although India announced a ban on wheat exports, it does not mean that Indian wheat is completely non-tradable, but the form of trade may change. More and more Indian wheat may be traded through government-to-government cooperation, such as this purchase in Egypt. In the future, Indian wheat may not go to places with higher bids, but to buyers determined by the Indian government
11. The euro is now expected to test parity for the first time in 20 years against the dollar, said Meera Chandan, a currency strategist at JPMorgan in London.
1. S&P: U.S. economic growth is expected to fall by 80 basis points to 2.4%
2. Wells Fargo: The U.S. economy is expected to experience a mild recession in late 2022 and early 2023
3. JPMorgan Chase: dragged down by factors such as the decline in the stock market, the US GDP forecast was lowered;
Falling stock prices, rising mortgage rates and a stronger dollar relative to trading partners will weigh on the economic outlook, lowering forecasts for the U.S. economy this year and next. The economic growth forecast for the second half of 2022 was lowered to 2.4% from 3%, the first half of 2023 forecast was lowered from 2.1% to 1.5%, and the second half of 2023 forecast was lowered from 1.4% to 1%. This will lead to a U.S. unemployment rate of 3.5% in the second half of 2023, compared with an earlier forecast of 3.2%. The Fed is stepping up its efforts to implement the required tightening measures in financial conditions, giving us some confidence that GDP growth will slip below potential in the coming quarters
4. A recession has become the base forecast scenario, and Wells Fargo has lowered its S&P 500 target twice in three weeks;
Wells Fargo lowered its forecast for the S&P 500 for the second time in three weeks, saying a mild recession is now its base case. Wells Fargo's consulting arm cut its year-end target for the S&P 500 by 300 points on Wednesday, after a 200-point cut in late April. The index is now expected to be in the 4200-4400 range before Christmas, implying a decline of as much as 7.7% for the year, but a gain of as much as 12% from current levels. "Since the beginning of the year, we've noticed a rising recession risk," Wells Fargo's advisory strategists wrote in a note to clients. We weighed the latest monthly and weekly data and the economy has crossed a probability level, making a mild and short recession our base case
5. Oanda: U.S. bond yields peaking may be good for gold;
Ed Moya, senior market analyst at Oanda: With the strong risk-off sentiment driving the dollar higher, some investors appear to be looking at gold as a safe-haven asset again. U.S. Treasury yields appear to have peaked, which could be good news for gold
6. High Ridge Futures: Gold prices are expected to gain support;
Another big sell-off in U.S. stocks, coupled with lower yields and safe-haven buying, is driving gold higher, said David Meger, head of metals trading at High Ridge Futures. The real question and sticking point is whether the Fed is doing enough, given the level of inflation. If this is not enough to quell inflationary pressures, gold will find support in this environment
7. JPMorgan Chase lowered its U.S. economic growth forecast;
JPMorgan lowered its forecast for real GDP growth in the second half of 2023 from 3% to 2.4%, lowered its forecast for real GDP growth in the first half of 2023 from 2.1% to 1.5%, and lowered its forecast for real GDP in the second half of 2023 from 1.4% to 1.5%. 1%
8. Morgan Stanley: Ukraine's GDP will decline;
Ukraine's 39% GDP contraction in 2022 is normal, Morgan Stanley says
Morgan Stanley also said Ukraine would lose access to the Black Sea if "there is no clear solution" to the Russian-Ukrainian conflict. In worst-case scenario, Ukraine's GDP will fall by 60% in 2022
9. Morgan Stanley: Geopolitical uncertainty supports the dollar stronger than expected;
Matthew Hornbach, global head of macro strategy at Morgan Stanley: We had expected the dollar to continue to strengthen in 1H22 as rising U.S. real yields and the Fed's hawkish stance would drive the 'policy divergence' narrative. Market expectations for the Fed are certainly headed in this direction, but the outlook for global growth has been surprisingly weak, and geopolitical uncertainty has been more supportive for the dollar than expected.
10. Rabobank: India may still export wheat, but the way of trade may change;
India recently announced a ban on wheat exports, but Egypt can still purchase wheat from India, suggesting that the export ban may not be as severe as the market imagines. Rabobank analyst Dennis Voznesenski said that although India announced a ban on wheat exports, it does not mean that Indian wheat is completely non-tradable, but the form of trade may change. More and more Indian wheat may be traded through government-to-government cooperation, such as this purchase in Egypt. In the future, Indian wheat may not go to places with higher bids, but to buyers determined by the Indian government
11. The euro is now expected to test parity for the first time in 20 years against the dollar, said Meera Chandan, a currency strategist at JPMorgan in London.
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