Markets mixed, oil price rise poses recession risk

Markets were mixed on Monday.

The S&P 500 fell 0.7 percent, the Nikkei 225 rose 1.6 percent while the STOXX Europe 600 was little-changed.

US oil benchmark WTI crude oil topped US$82 a barrel at its session highs on Monday and Bernstein’s Neil Beveridge said in a Monday note: “High or rapid increase in energy costs have triggered recessions in the past and there is a possibility that history could repeat itself if energy prices continue to rise.”

Goldman Sachs on Monday cut its US economic growth forecast for 2022 to 4 percent from 4.4 percent.

Meanwhile, analysts estimate an earnings growth rate of 27.6 percent for the S&P 500 in the third quarter, which would be the third-highest growth rate since 2010.