Stock Market Crash: 45% Downside Ahead For S&P 500, Expert Warns

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A 31-year market vet who called the current bear market says the S&P 500 has another 45% downside as investors remain blind to signs that a recession is hurtling toward the US economy

And then there's the yield curve, which remains near its most inverted level in four decades. An inverted yield spread between the 3-month Treasury bill and 10-year Treasury note have preceded every recession since the 1960s.

Inversions of the spread between yields on the 2-year and 10-year notes — shown below — has been slightly less accurate, but they are still a fairly reliable recession and bear market indicator.Finally, lending standards are tightening, which will lead to a credit crunch, Wolfenbarger said. The percentage of banks tightening their lending standards is now above 44%, and is approaching levels seen during prior downturns.

His bearish outlook stems from how high stock valuations are relative to 10-year Treasury yields. Below is a chart he cited from John Hussman, the president of the Hussman Investment Trust who called the 2000 and 2008 crashes.He said the bear market would resume in a big way once unemployment starts to rise. As of Friday, it sits at 3.5%. But the Fed projects it to go to 4.5% by the end of 2023.

 

ขอบคุณสำหรับความคิดเห็นของคุณ ความคิดเห็นของคุณจะถูกเผยแพร่หลังจากได้รับการตรวจสอบแล้ว

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US equities do look like they have some downwards pressure this year but for investor's with a long enough time horizon these dips can present opportunities to buy. Learn more for free below.

More like depression?

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