JPMorgan Chase: Most Severe Phase of US Stock Market Pullback May Be Over, Credit Market Indicates Low Risk of Recession

BlockBeats News, March 13th: JPMorgan Chase strategists believe that the most severe phase of the U.S. stock market pullback may have already ended, and the credit market indicates a relatively low risk of economic recession. Strategists Nikolaos Panigirtzoglou and Mika Inkinen pointed out in their report on Wednesday that, compared to the stock and bond markets, the credit market, which has provided accurate signals multiple times over the past two years, is less concerned about the risk of a U.S. economic recession.

The analysis shows that smaller companies, which are more sensitive to economic growth, are better suited to measure the cyclical risks in the United States. Currently, the small-cap stock market reflects about a 50% probability of a recession, which is in line with expectations in the bond and commodity markets. However, the U.S. bond market implies a recession probability of only 9% to 12%. The recent market adjustments have been more driven by quantitative funds rebalancing their positions rather than fundamental investors or active management investors reassessing the risks of a U.S. economic recession. (FX678)