On April 9th, JPMorgan Chase announced that the probability of an economic recession in stocks closely related to the US economy has skyrocketed to nearly 80%. At the same time, although financial pressure may intensify, credit product investors remain optimistic. According to J.P. Morgan’s market-based recession indicator dashboard, the Russell 2000 index, which has been hit hard in the recent sell-off, currently reflects a 79% likelihood of an economic recession. Other asset classes are also issuing warnings: the S&P 500 index shows a 62% probability of an economic recession, base metals show a 68% probability, and 5-year US Treasury bonds correspond to a 54% probability. In contrast, the probability of economic recession digested by the investment grade credit market is only 25%, which was zero in November last year. As a more cyclical index, the Russell 2000 should better reflect the position of the US economy in the cycle. Currently, the average degree of economic recession probability digested by the index is as high as 80%, “said Nikolaos Panigirtzoglou, a strategist at JPMorgan Chase.” The market has almost 100% digested the scenario of mild recession
Scan code to share