Pessimism concerning the broader markets is above its historical average of 30.5% for the 45th time out of the past 46 weeks, according to the latest American Association of Individual Investors (AAII) Sentiment survey. Amid the Fed’s consecutive rate hikes, the S&P 500 lost 24.7% year-to-date. While JPMorgan’s chief executive believes the S&P 500 could decline by another 20%, Tobias Adrian, director of monetary and capital markets at the International Monetary Fund, said it is “certainly possible.”
Adrian also warned of significantly high financial stability risks, and the global economy is in a “very, very stressed moment.” Moreover, non-farm payrolls increased by 263,000 jobs in September 2022, and tight labor market conditions are prompting the Fed to continue its hawkish rate hikes.
