Stop rejoicing, the downturn is coming soon, warn Michael Burry, Morgan Stanley and BlackRock
The market is flooded with positive macroeconomic news, investor sentiment has improved and fears of a recession are receding somewhat. But this does not mean that all danger is over. Quite the contrary - and that is what several big names on Wall Street and in the financial world are afraid of.
US equities have just had their best start to the year since 2019, which is a little strange because for several months before that investors were extremely worried about rising interest rates and the threat of a recession.
The S&P 500 has gained nearly 7% so far in 2023 after last year's giant plunge, which was the worst since the 2008 credit crisis. Its gain last month was the best in January in four years.
The recent rally has been driven mainly by hopes that rapidly cooling inflation in the U.S. will allow the Federal Reserve to stop raising interest rates or even start cutting them this year. Several other macro reports also…