Goldman Sachs analysts predict that the U.S. government is "more likely than not" to shut down later this year due to spending disagreements, which could temporarily impact economic growth by reducing it by 0.15-0.2 percentage points per week, with past shutdowns having minimal impact on equity markets.
The US banking industry could face a significant drop in stock prices within the next 16 months if the economy enters a recession, according to macro guru Hugh Hendry.
The majority of economists polled by Reuters predict that the U.S. Federal Reserve will not raise interest rates again, and they expect the central bank to wait until at least the end of March before cutting them, as the probability of a recession within a year falls to its lowest level since September 2022.
Despite the optimism from some economists and Wall Street experts, economist Oren Klachkin believes that elevated interest rates, restrictive Federal Reserve policy, and tight lending standards will lead to a mild recession in late 2023 due to decreased consumer spending and slow hiring, although he acknowledges that the definition of a recession may not be met due to some industries thriving while others struggle.
Fidelity International's Salman Ahmed maintains his prediction of a recession next year, citing the full impact of the Federal Reserve's monetary policy tightening and a wave of corporate debt refinancing as leading factors.
Top economist David Rosenberg predicts that the US will experience a recession within the next six months due to the aggressive interest rate hikes by the Federal Reserve and the erosion of credit quality in credit card debt.
Goldman Sachs chief economist Jan Hatzius has revised his forecast for a U.S. recession in 2023, lowering the probability from 35% to 15% due to positive inflation and labor market news, while still expecting a mild economic slowdown.
Despite recent optimism around the U.S. economy, Deutsche Bank analysts believe that a recession is more likely than a "soft landing" as the Federal Reserve tightens monetary conditions to curb inflation.
Goldman Sachs is planning to cut jobs for underperforming employees, targeting a lower percentage of layoffs in its investment banking and trading divisions.
Former Goldman Sachs partner Abby Joseph Cohen believes that while a recession is not the most likely scenario, the probability of an economic downturn has been increasing in recent months due to weakening tailwinds and potential political issues.
The odds of a recession in the US have collapsed, making markets vulnerable to any signs of the economy overheating and contributing to inflationary pressures.
The US economy is facing a looming recession, with weakness in certain sectors, but investors should not expect a significant number of interest-rate cuts next year, according to Liz Ann Sonders, the chief investment strategist at Charles Schwab. She points out that leading indicators have severely deteriorated, indicating trouble ahead, and predicts a full-blown recession as the most likely outcome. Despite this, the stock market has been defying rate increases and performing well.
Goldman Sachs predicts that the August consumer price index (CPI) will show a 3.58% annual increase, with a decline in used car prices, higher airfares and transportation prices, and stable shelter inflation.
Goldman Sachs CEO David Solomon believes the U.S. economy is unlikely to experience a significant recession, but warns that inflation will be more persistent than anticipated.
Goldman Sachs and J.P.Morgan have revised their full-year growth forecast for the UK's GDP due to a sharp contraction in the economy in July, with JPM now expecting 0.4% expansion and Goldman Sachs projecting 0.3% growth. Economists warn of the possibility of a recession as poor economic data continues to emerge, and GDP data indicates a weakening economy.
The Federal Reserve Bank of New York's recession probability tool, which examines the difference in yield between the 10-year U.S. Treasury bond and three-month bill, suggests a 60.83% probability of a U.S. recession through August 2024, indicating that stocks may move lower in the coming months and quarters. However, historical data shows that U.S. recessions are typically short-lived, and long-term investors have little to worry about.
Economist Gary Shilling predicts that the S&P 500 will decline by around 40% during this market cycle, citing recession indicators such as the yield curve and The Conference Board's Leading Economic Index. He believes that a US recession may already be underway due to the Federal Reserve's focus on reducing inflation, and high valuations in the stock market increase the likelihood of a significant drop.
Goldman Sachs warns that three factors - the resumption of student loan payments, the autoworkers' strike, and a potential government shutdown - could lead to a significant slowdown in US GDP growth during the fourth quarter of 2023.
Goldman Sachs strategists predict that the Federal Reserve is unlikely to raise interest rates at its upcoming meeting, but expect the central bank to increase its economic growth projections and make slight adjustments to its interest rate projections.
Goldman Sachs lowers its profit outlook for Tesla due to lower average selling prices and predicts that the company may cut vehicle prices in 2024 to maintain high volumes, leading to a decrease in Tesla stock.
The Federal Reserve has paused raising interest rates and projects that the US will not experience a recession until at least 2027, citing improvement in the economy and a "very smooth landing," though there are still potential risks such as surging oil prices, an auto worker strike, and the threat of a government shutdown.
The leading economic indicator dropped 0.4% in August, marking the 17th consecutive month of decline, but there is no indication of a recession in the U.S.
The forecasted U.S. recession in 2024 is expected to be shorter and less severe than previous recessions, with the economy's interest-rate sensitivity much lower due to reduced leverage and elevated savings from the postpandemic environment, leading investors to consider positioning for investment opportunities that will drive markets into 2024.