Economy Hitting Its Trough And Market Rebound Inches In: Barrons Daily

The US economy may have hit its trough and the Barron’s Daily newsletter argues that the stock market may have started the rebound, never mind the dark clouds of weak recession that linger on the horizon, Brian Swint reported.

Photo Insert: JPMorgan, Bank of America, and Citigroup don’t see a soft landing as their most likely outcome this year.

After the most aggressive Federal Reserve tightening campaign in a decade amid soaring inflation, most economists now see a US recession starting in the first quarter, according to the latest Wall Street Journal survey. Investment banks posting earnings statements concur.

JPMorgan, Bank of America, and Citigroup don’t see a soft landing as their most likely outcome this year.

From a global perspective, International Monetary Fund Managing Director Kristalina Georgieva says world growth will definitely slow this year, with its forecast for expansion about half a percentage point lower than for 2022. But the good news from the IMF’s Georgieva is that she doesn’t expect to have to downgrade her forecast and sees a recovery in 2024.

JPMorgan’s Jamie Dimon, who once foresaw an economic hurricane, now thinks any recession will be mild.

China is expected to start recovering soon after posting some of the worst growth on record in 2022. That’s good news for companies such as Netflix, which profits from foreign subscriptions. And it’s great news for investors.

The market usually bottoms out before the economy. The start of a recession often coincides with the start of a market rebound. The S&P 500 is up 4% since Jan. 1. The rebound in markets may have already begun.

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