9 charts that reveal that global stock markets are heading towards a general ...

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Stocks may be rallying to all-time highs, but that doesn't mean Wall Street's fears of an economic downturn have completely dissipated. In fact, even prominent investors like Evercore founder Roger Altman have predicted a recession by the end of 2023 . This is because, while this market rally looks good for equities in general, its actual mechanics are much more complicated. Many analysts have pointed out that, at its core, the current rise in stock prices has been unsustainably driven by large-cap technology companies linked to artificial intelligence. For example, Joe Mazzola – trading director at Charles Schwab – believes that an inevitable correction awaits these very bullish stocks at some point . These stocks have outperformed so much that it seems like there has to be some mean reversion," he told Business Insider in a recent interview.

And according to analysts at the investment bank UBS, a possible general decline in the markets would not be concentrated solely in the technology sector. "Most on the street, including us, have believed that a recession and weaker earnings would Algeria Phone Number List jeopardize equities in 2023," a team of UBS strategists, led by chief strategist Bhano Baweja, wrote in a note. on June 28. "The pace of growth is weaker than in investors' accounts and much weaker than what is valued in the markets." However, Baweja adds that a potential stock market decline does not necessarily have to be due to a decline in corporate profits, which has been one of the headwinds most cited by bearish experts.



An initial scenario of low stock correlations, credit rating downgrades and an acceleration of liquidity depletion suggests that valuations will likely be compromised before earnings are," he explains. In the note, Baweja and his team also share nine "essential" charts that show why they expect equities to crash this year. Why Germany's economic crisis is more than a mild recession Recession in Germany 1.  3. The Federal Reserve's balance sheet will shrink further FED Balance Chart UBS As part of the Fed's quantitative tightening efforts, the central bank's balance sheet is likely to shrink to between $7.25 billion and $7.5 billion by the end of the year, Baweja says.