The recent economic downturn due to Covid-19 has added to the woes of the United States, with concerns about the stability of financial markets resurfacing. BCA Research, a Canadian investment research organization, predicts volatility in the US stock market in the days ahead.
In a report by Fox Business, BCA Research’s chief global strategist Peter Berezin has warned clients that the economy could slip into a recession either this year or in early 2025. This prediction suggests that the S&P 500 could see a significant drop to 3,750, marking a 30% decrease from current levels if a recession were to occur. Berezin’s forecast is based on the assumption that the labor market will slow down significantly in the near future, putting a strain on consumer spending, which is a key driver of economic growth.
Berezin points to the relationship between inflation and unemployment, as represented by the Phillips curve, to support his analysis. He highlights that while the US economy was able to avoid a recession in recent years due to its position along the steep side of the Phillips curve, he now anticipates challenges in economic growth. Slowdowns in China and Europe could impact global stock markets and put pressure on international economies.
Despite recent highs for the Dow Jones Industrial Average at 40,000 in May, this prediction may be one of
