Financial Associated Press, May 13 (editor Huang Junzhi) even though the US stock market is less than 1% away from its all-time high, it still cannot shake the minds of bears. "doomsday theory" is sweeping Wall Street.
Some analysts warned that a weaker-than-expected jobs report in April and a surge in weekly jobless claims meant a recession was just around the corner. Others hinted that a stock market crash similar to that of 1929 was imminent.
Take a look at what doomsday theorists predict:
Gary Shilling: the recession before the end of the year means the stock market plummeted by 30%
Gary Shilling, president of economic consultancy A. Gary Shilling & Co, a legendary investor who accurately predicted the 2008 financial crisis, said he expected a recession by the end of the year as the labor market showed signs of weakness. Weakness in the labour market will dampen investor confidence and cause the stock market to fall by 30 per cent.
"if you look at all the guesses we've made, it shows that people are overconfident, and these guesses are usually corrected and fiercely corrected. I think if we are not in a recession now, we will see it later this year. " He said.
The experienced economist has been known for correctly predicting several major market trends over the past 50 years. Shilling served as Merrill Lynch's first chief economist before founding his own consulting firm in 1978.
John Hussman:65% 's stock market crash is not surprising
John John Hussman, a well-known American fund manager, issued a message to the stock market last week.CardrouletteThere was a bearish warning that the S & P 500 was at similar extreme levels before the Great Depression in 1929 and that investor fears of missing out on the opportunity to get in the car dominated the market.
Statistically, current market conditions look more like the peak of a big bull market than at any time in the past century. There is no guarantee that the market will plummet or that it will not rise further. However, given the combination of extreme valuations, adverse market internal factors and dozens of other factors, these are the most like the top factors in history, and we have no problem with risk aversion or even bearish prospects. " He said.
Mr. Hussman said he wouldn't be surprised if the s & p 500 tumbled 65%, which would erase a decade of gains in the stock market and bring the index down to about 1800 points, or where it was in February 2014.
From 1998 to 2000, Hussman founded the hedge fund, Husman Strategic Advisors (Hussman Strategic Advisors), which successfully foresaw the dotcom bubble. After that, he also successfully foresaw the global financial crisis of 2008-09.
BCA Research::2025 's recession at the beginning of the year will cause the stock market to fall by 30%.
Roukaya Ibrahim, a strategist at BCA Research, a global research firm, has warned that the recession early next year could trigger a 30 per cent correction in the stock market.
The combination of rising stock valuations and slowing economic growth will push the S & P 500 back to 3600, where it bottomed in October 2022, he said in an interview.
He pointed out that the April employment report showed that the U.S. economy grew by 17 percent.Cardroulette.50, 000 jobs, but vacancies, hiring and resignation rates have all fallen, all of which suggest that the economy is turning downwards rather than upwards.
"eventually, unemployment will rise, which will raise fears of a recession." He said.
David Rosenberg: there are growing signs that the US economy may have a hard landing.
With signs of weakness in the labour market, the US may be entering a recession, said David Rosenberg, president of Rosenberg Research, a top US economist.
"We are often asked when we plan to give up our prediction of a recession, but maybe it is time for people to start asking when others will start to face it," he wrote in his latest report. We have seen a decline in data flow, which is beginning to suggest that the recession may not be as far away as many people think. "
The Sam rules are about to warn of a recession after the unemployment rate rose to 3.9% in April and manufacturing activity contracted for the 17th consecutive month in the past 18 months, Rosenberg said.
The Sam rule is an indicator used to predict a recession based on changes in the unemployment rate. Specifically, when the three-month average of unemployment rises to 0.50 percentage points above the lowest in the past 12 months, it is considered a possible sign of recession. The rule was proposed by economist Claudia Claudia Sahm.
"Don't be complacent. The job market is collapsing, a slowdown in service sector activity is dragging down real-time economic growth, while forward-looking financial signals still indicate a slowdown, "Rosenberg said. He successfully predicted the recession in 2008.