Prepare for a significant correction in stock markets, warned on Monday Moody’s analyst Mark Zandi, quoted by CNBC. The company’s chief economist expects markets to lose between 10% and 20% due to the Federal Reserve’s “hawkish” position.
Moreover, the economist this time does not expect a rapid recovery of the markets after the downturn, as shares are too expensive. According to his calculations, it will take about a year for them to return to their current levels.
“Counter-winds are emerging for the market,” Zandi said.
The adjustment may have already begun, as investors already look scared. The Dow recorded its biggest one-week decline since October 2020, losing 3.45%. The broader S&P 500 also reported its worst week since late February. Nasdaq also erased part of its value, but is only 1.28% of the top.
Despite the warning about the markets, Zandi does not believe that the economies will enter a new recession, as the decline is due to too expensive stocks and not a serious fundamental problem.
Shares in the Pacific markets traded red this morning. The Japanese Nikkei 225 index lost 4% and later recovered some of the losses. In Hong Kong, shares deleted 1.35%, and in mainland China – 0.22%. South Korean Kospi lost 1.09%.
The economist points out that problems also arise with raw materials and cryptocurrencies. He also expressed concern about the very hot housing market in the United States.
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