economy
JPMorgan cuts official S&P 500 forecast, noting rising recession risk from oil shock
Dubravko Lakos-Bujas, the firm's head of global markets strategy, now expects the S&P 500 will end the year at 7,200, instead of 7,500.
TL;DR
- JPMorgan lowered its S&P 500 year-end forecast to 7,200, down from 7,500, due to rising oil prices.
- Strategist Dubravko Lakos-Bujas believes traders are complacent about the U.S.-Iran war and its impact on oil prices and the Strait of Hormuz.
- Higher oil prices are expected to negatively impact consumer demand, increasing the risk of a recession.
- A sustained 10% increase in oil prices could reduce GDP by 15 to 20 basis points.
- The S&P 500 has dropped below its 200-day moving average, indicating a negative long-term trend.
- Support levels for the S&P 500 may be found between 6,000 and 6,200 if current support fails.