Wednesday 13 February 2019

Markets rise amid recession warnings

Markets rose on Tuesday.

The S&P 500 jumped 1.3 percent, the STOXX Europe 600 rose 0.5 percent and the Nikkei 225 soared 2.6 percent.

In the US, Democratic and Republican lawmakers reached a deal on the budget late on Monday to help boost investors' sentiment but some remain cautious on the market.

Mike Wilson, chief equity strategist at Morgan Stanley, on Monday downgraded S&P 500’s earnings-per-share growth target for the year to 1 percent from 4.3 percent and warned of a looming earnings recession.

“Our earnings recession call is playing out even faster than we expected,” said Wilson.

Hayman Capital Management founder Kyle Bass thinks that “by the end of the year the US market will be lower than it is today”.

Bass thinks that the US economy “will begin to wane in the back half of 2019, and by the middle of 2020 we’ll most likely be in recession”.

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