JPMorgan Strategists Suggest U.S. Stock Market Downturn May Have Ended

According to BlockBeats, JPMorgan strategists have indicated that the most severe phase of the U.S. stock market downturn might be over, with credit markets showing a lower risk of economic recession. In a report released on Wednesday, strategists Nikolaos Panigirtzoglou and Mika Inkinen highlighted that, unlike the stock and interest rate 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 suggests that smaller companies, which are more sensitive to economic growth, are better suited to gauge the cyclical risks in the U.S. Currently, the small-cap stock market reflects an approximate 50% probability of recession, aligning with expectations from the interest rate and commodity markets. However, the U.S. debt market indicates a recession probability of only 9% to 12%. Recent market adjustments have been driven more by quantitative funds adjusting their positions rather than fundamental investors or active managers reassessing the risk of a U.S. economic recession.