One Risk Was Missing From Strategists’ 2023 View: Banking Crisis
- Bank turmoil has revived recession fears and trimmed rally
- BofA’s Hartnett predicted a credit event would mark a 2023 low
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Of all the top Wall Street strategists who predicted a rocky first half for equity markets back in December, many warned about mounting economic and profit risks from higher interest rates, but no one saw the turmoil in the banking sector coming.
The sudden collapse of a number of US regional lenders, including Silicon Valley Bank, and the meltdown in Credit Suisse Group AG shares, caught the leading prognosticators by surprise as they had primarily focused on the fallout from recession risks, rising rates and inflation’s damage to corporate earnings.