The world’s top bank has advised investors to brace for a drop in shares. Morgan Stanley expects the S&P 500 index to fall 25% in the worst case scenario for the US economy.
In August, the main stock index, the S&P 500, which tracks the shares of the largest companies by capitalization, began to fall due to fears of a possible recession in the US economy. The aggressive monetary policy applied by the authorities to combat record inflation may lead to this.
In the best case scenario, the index will fall 15% in the second half of the year, Morgan Stanley forecasts. A “soft landing” of the economy will lead to this scenario. In the worst case, the index will collapse by 25%; this will happen if the US actually starts a downturn in the economy.
No matter how things play out, US stocks could fall in the next one or two quarters, the bank’s currency strategist Mike Wilson said.
Author:
Kirill Bilyk
Source: RB
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