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Money managers see recession impending, market volatility likely to continue – Russell Invest


VOLATILITY AHEAD - Business Chalkboard Background

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Russell Investments said on Thursday that Wall Street investment managers generally see a downturn in the US economy as likely, with market volatility set to continue into the final months. year 2022.

Aggregate opinions of centralized investment managers across different sectors of the market, Russell stressed that the Wall Street community remains worried about rising inflation levels, hawkish central bank officials and the uncertain economic environment in Europe and UK. They are also worried about the possibility that the US will also face a contraction.

“Most managers still believe a mild recession is the most likely outcome, especially for the US,” the company said in its investment managers’ summary of its outlook. at the end of the third quarter.

“As recession concerns persist, [investment] Managers continue to look for profits in sectors that can provide hedges against inflation, along with downside protection. Many are expressing a preference for companies with strong pricing capabilities, strong market share, and little or no leverage,” added Russell.

The company notes that the general consensus among regulators calls for better performance among non-US stocks than those in the US. The Fed has finally changed its extremely hawkish policy.

While the average US principal equity (DJI) (SP500) (COMP.IND) and the broad market ETFs that track them (DIA) (NYSEARCA:SPY) (NYSEARCA:IVV) (NYSEARCA:VOO) (NASDAQ:QQQ) bounced off their recent yearly lows, the stock remained down heavily for the whole year. The S&P is down 20% in 2022, while the Nasdaq is down more than 30%.

In the longer term, Russell’s survey of money managers shows that inflation remains one of the key concerns, even as the Fed and other central banks take aggressive steps to keep it under control. control price increases.

“One of the key risks cited by equity managers in our Q3 report is the possibility of inflation remaining stuck at high levels. This could lead to a sharp slowdown. in global growth as central banks continue to raise interest rates aggressively, so the company can take note.

Looking at Thursday’s trading, the main market traded on average mixed as investors released Q3 GDP growth and PCE price index reading slowed down.

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