[Mercato USA]Stocks continue to fall, risk aversion: Big bank CEO’s economic pessimism continues – Bloomberg

The US stock market continued to fall by 6. Executives of major banks expressed pessimism about the economy amid growing concerns about the impact of US monetary policy on economic growth and corporate earnings.

Tech giants like Apple and Microsoft are sold off and the market is severely compressed. The tech-heavy Nasdaq 100 index fell 2%. The S&P 500 stock index fell for the fourth consecutive day. All but two of the companies in the KBW Banks Index fell.

Goldman Sachs Group CEO David Solomon said:Hard timesis waiting,” he warned that it would not be surprising if bonuses were cut or staff cuts were implemented. Bank of America (BofA) is slowing hiring as fewer employees leave in preparation for a possible recession, it said CEO Brian Moynihan Jamie Dimon, CEO of JPMorgan Chase & Co., told CNBC that the economy could experience a “moderate to severe recession” next year.

“The stock hasn’t bottomed yet,” said Lauren Goodwin, a portfolio strategist at New York Life Investments. “While the current period of volatility in equity markets is likely to end in the coming months, corporate earnings still have to adjust to a recessionary environment.”

Morgan Stanley Asset Management’s Lisa Charlett said that as economic growth and inflation weaken consumers’ purchasing power, some of the biggest companies could see a much larger-than-expected drop in earnings next year. “A lot of corporate guidelines are delusional,” she said, adding that “a lot of people suddenly find themselves in an uncomfortable reality.”

US treasures

US Treasuries have jumped on the pursuit of security. Gains expanded in the late stages of trading. The 10-year bond yield temporarily fell by 7 basis points (bp, 1 bp = 0.01%) to 3.51%.

foreign currency

In the foreign exchange market, the dollar strengthened against most of the 10 major currencies. Despite having fallen for some time, buying has returned to the dollar, which is considered a safe asset, against the backdrop of falling share prices.

The dollar is about 137 yen against the yen. Earlier in the morning, the pair fell below 136 yen as the dollar sold and the yen bought.

“Unless there is a more substantial change in the outlook for the Fed, we cannot be sure that the dollar’s rally will be sustainable,” Scotiabank’s Sean Osborne said in a note on Wednesday. “However, the dollar may be able to maintain some strength in the near term as investors begin to turn their attention to next week’s Federal Open Market Committee (FOMC) meeting, as Federal Reserve Chairman Jerome Powell” chances are good that the Fed will try to skew interest rate expectations higher at the meeting.”

“For the dollar to fall further, investors need to be confident in expecting a continuation of the dollar’s downtrend. “Such forecasts are premature and we assume the dollar will recover towards the end of the year.”

raw

New York crude futures fell sharply to their lowest level since December last year. Investors trimmed their positions in oil due to widespread selling in financial markets.

West Texas Intermediate (WTI) lost all of its year-to-date gains in today’s decline. Liquidity in the crude oil market continues to decline. Open interest in North Sea Brent crude oil futures is at its lowest since 2015. As of December, traders are trimming their positions.

Citigroup’s global head of commodities research Ed Morse said in an interview with Bloomberg Television that traders were “fleeing the market” after recent “irrational” price moves in the oil market. “The end of the year is approaching and anyone who has made a profit this year doesn’t want to lose it,” he said.