Wall Street is getting very close to saying the dreaded “r” word — recession.
This year has been one of the most pessimistic times on the Street since the onset of the Great Recession in 2008, with analysts releasing a flurry of reports on Monday predicting that markets and economic growth will slow, but stopping short of calling it a recession.
Goldman Sachs and JPMorgan released reports that painted a picture of a tightening economy. Goldman predicted that the supply of oil would dwindle a bit, sending prices up, while JPMorgan revised Treasury yields down on “weaker growth expectations, greater sensitivity to global monetary policy, and a backdrop of low risk appetite.”
“We’ve had crises in the past. What’s different about this is there’s not a crisis and we still feel pessimistic,” Paul Mortimer-Lee, chief economist at BNP Paribas, told The Post. “If something nasty comes around the corner, we’re in trouble.”
The cloudy economic forecast comes after an abysmal first quarter that saw the Dow Jones plummet nearly 2,000 points since Jan. 1.
While the index has since rebounded, and ended at 17,710.71 on Monday, economists are predicting that odds are nearly even that the economy will take a downturn in the next year.
“We’ve got about a 40 percent chance of recession on the next 12 months,” Mortimer-Lee said.
Both Goldman and Bank of America have released reports recently that predict the stock market could see a broad selloff during the summer months.
Goldman said the S&P 500 could plummet 10 percent this year, in part over uncertainty about whether the Federal Reserve will hike borrowing costs.