Risks
JPMorgan Model Shows Recession Odds Fall Sharply Across Markets
- Investors return to riskier assets as soft-landing hopes build
- S&P 500 still assigns 73% recession bet, from 98% in October
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In a week marked by fresh recession angst from Wall Street to Davos, JPMorgan Chase & Co. finds the odds of an economic downturn priced into financial markets have actually fallen sharply from their 2022 highs.
According to the firm’s trading model, seven of nine asset classes from high-grade bonds to European stocks now show less than a 50% chance of a recession. That’s a big reversal from October when a contraction was effectively seen as a done deal across markets.