Trend: The BCA editors predict that the stock market will fall by 20% this year (we have already seen a 15% drop just in the last three weeks).
Gary Halbert reports that The Bank Credit Analyst editors have changed their outlook, saying that the US is headed into a recession this year, a major change in their outlook. Excerpts below.
Link: InvestorsInsight : Forecasts & Trends.
BCA has changed it view on the US economy and now forecasts a recession in 2008. They believe the recession is unfolding now and will last for apprx. one year, with GDP averaging negative 2% for the next 12 months or so, with the economy rebounding sometime in 2009.
While the editors continue to maintain that the US economy is on solid footing, they believe that increasing problems in the housing slump/subprime mortgage dilemma/credit crunch will continue to undermine consumer confidence to the point that we will go into a recession this year, contrary to their advice over the last year.
The BCA editors now predict that the stock market will fall by apprx. 20% this year, but they note that we have already seen a 15% drop just in the last three weeks. So, in their view, much of the damage has already been done. In any event, they see the US stock markets bottoming by mid-year.
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