Meanwhile, according to the bank’s latest aggregate measure, UBS bank (SWX: UBSG) analysts see an increased chance of recession, raising the probability now to 60%. In comparison, economist Pierre Lafourcade and his team at UBS had seen a 40% recession probability in June. Further, these measurements are performed monthly, aggregating the U.S. treasury yield curve, hard macro, and credit data. The economists also elaborated that the economy is in a ‘contractionary’ phase, but they remain optimistic that a full-scale recession will not occur just yet.
Playing defense
Bank of America (NYSE: BAC) securities clients were sellers of equities during the last few sessions, according to the data provided by BofA. A lot of outflows were seen from the cyclical sectors, as investors fear a hard landing due to Fed’s fight against inflation, while defensive sectors have seen a lot of inflow, which, according to the data, happened only in January 2022. Furthermore, another overhang above the markets could be the housing sector, where sales have slowed down considerably. Increasing mortgage rates are making things tougher for home buyers, meanwhile, inflation keeps hovering at historically high levels, piling on more worries for potential new buyers of homes. All in all, worries of a recession and a global slowdown are increasing on a weekly basis as new data keeps popping up and showing a slowdown across numerous sectors, while hedge funds pile into short positions. Buy stocks now with Interactive Brokers – the most advanced investment platform Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
