The recent economic downturn caused by Covid-19 has reignited concerns about the stability of global financial markets, particularly in the US. BCA Research, a Canadian investment research organization, is predicting increased volatility in the US stock market in the near future. According to Peter Berezin, the chief global strategist at BCA Research, the US economy could potentially fall into a recession either this year or in early 2025.
Berezin warned that if a recession were to occur, the S&P 500 could tumble to 3,750, a 30% drop from current levels. This prediction is based on the belief that the labor market will slow significantly in the coming months, putting pressure on consumer spending which is a key driver of economic growth. Berezin also highlighted concerns about the relationship between inflation and unemployment, as measured by the Phillips curve.
In addition to domestic concerns, Berezin also predicts a notable slowdown in economic growth in China and Europe, which could further weaken the global economy and put pressure on international stock markets. The recent drop in the Dow Jones Industrial Average from its record high of 40,000 in mid-May reflects the uncertainty and volatility in the market.
Overall, investors will need to closely monitor market trends and make informed decisions to navigate potential risks and opportunities in