Everything-Selloff on Wall Street Deepens on 98% Recession Odds

Monday brought a stark warning for Wall Street daredevils: Stocks are still in free fall and bearish sentiment is far from getting exhausted -- especially with hawkish central bankers rattling recession-obsessed markets like this.

The S&P 500 just sank to the lowest since December 2020, bringing this month’s losses to nearly 8%, as the pound weakened to records while commodities buckled under the weight of a hulked-up dollar. US Treasury yields continued to rise, with the 10-year rate climbing as much as 21 basis points to 3.898%, its highest level since April 2010.

Monetary policy makers in Europe and the US gave no succor to risk assets that keep notching wretched milestones in the face of a concerted global increase in interest rates.

To cap it off: Ned Davis Research now sees a 98% chance of a looming global recession while Morgan Stanley Wealth Management’s Lisa Shalett warns earnings optimists are sleepwalking off a cliff.

With bad news around the world piling up, selling pressure is still coming thick and fast for an equity market that’s already enduring its worst performance since 2008.

“Unfortunately, this is just a process that’s going to need to play out because the Fed is not going to stop and the market has to price in accordingly,” Stephanie Lang, chief investment officer at Homrich Berg, said by phone. “There’s still some downside because of the outlook that if we’re not in a recession, we will be in one soon.”

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