US Markets Tumble as Real Estate Weakens, Putin Suspends Nuclear Treaty, Morgan Stanley Warns of Stock Market ‘Death Zone’
All four major US stock indexes fell on Tuesday as real estate data showed home sales fell 0.7% last month and Russian President Vladimir Putin suspended a nuclear arms control treaty with the United States. In addition, the chief US equities strategist at Morgan Stanley said the stock market is in a “death zone” and could fall another 26%.
Investors fear protracted recession as US-Russia tensions further undermine global markets
On Tuesday, markets traded lower compared to the previous day as investors were shaken by the current macro environment. The National Association of Realtors (NAR) has published report on Tuesday, showing a weakening US housing market, with home sales falling 0.7% in January. Price gold and silver as good as cryptoeconomics fell, with the latter losing 1.37% in the past 24 hours, to $1.11 trillion. Stock followed the same patternwhile all four major stock indexes (DJI, GSPC, IXIC, RUT) fell from 1.9% to 2.79%.
The NAR report, coupled with continued elevated inflation, has raised concerns among investors that the US Federal Reserve will continue to raise rates, with some believing that this could bring down the US economy. Moreover, on Tuesday, tensions between the United States and Russia increased significantly, and many believe that we are on the verge of third world war. Russian President Vladimir Putin suspended the New START and put the missiles on alert.
Putin said the West was involved in creating a “despicable method of deception” when the US and other countries got involved in the affairs of Syria, Libya and Iraq. “Russia is suspending its participation in the new START treaty,” Putin said. emphasized at a national event. The nuclear treaty, signed by former presidents Dmitry Medvedev and Barack Obama in 2010, was designed to prevent nuclear testing and war. Putin’s speech is not well received by global investors as the Ukrainian-Russian conflict has weakened the global economy.
Morgan Stanley strategist warns of ‘death zone’ for US stock market
In addition, Morgan Stanley strategists do not believe that the US central bank and its chairman, Jerome Powell, will change their mind this year. Michael Wilson, chief US equities strategist at Morgan Stanley, made the announcement. warned that the stock market is now in the “death zone”. Wilson clarified that the name “death zone” is a common term in mountaineering, when people who climb very high altitudes lose oxygen. Wilson believes that stock markets are in a similar dead zone, and he predicts that the S&P 500 (GSPC) can go down 3,000 points in a short amount of time.
“Many deaths in high-altitude mountaineering have been caused by the death zone, either directly due to loss of vital functions, or indirectly due to poor decisions made under conditions of stress or physical debilitation that lead to accidents,” Wilson explained in his memo. for investors. “It’s the perfect analogy for where stock investors are today, and quite frankly, where they’ve been many times over the last decade.”
Between rising inflation in the economy, a downturn in the US real estate market and rising tensions with other countries, problems in the US continue to mount. The headwind associated with higher Fed interest rates and the daily rise in the cost of living for the average American has slowed the country’s growth, and many suspect a long recession is coming. In addition, a recent study shows that 55% of Americans believe they will lose everything if a recession hits the United States. Most survey respondents (three out of four) suspect that a recession will come this year.
What do you think about the current state of the stock market and growing economic fears in the United States? Do you agree with the Morgan Stanley strategist’s “death zone” warning, or are you more optimistic about the future of the US economy? Share your thoughts in the comments section below.
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