Top market analysts are checking market indicators to verify if what Savita Subramanian, Bank of America's head of U.S. equity and marketing, is saying might be true. At "We looked at all of these indicators that have been pretty good at forecasting recessions and we extrapolated that if they follow the current trends they're on, we're going to hit a recession sometime in the second half of next year." Subramanian recently declared on CNBC's "Fat Money"
While the index market S&P registered a near all-time high of 1,193.81 on August 15, 2016, Subramanian is expecting a seven percent reduction or 2,000 by the end of the year. The forecast is based on the volatile situation in the market, where unfavorable news triggers downward trends in the market.
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"I think that speaks to the reaction function of the market. There are a lot of itchy trigger fingers. There's lot of violent trades that can really roil a fairly complacent environment."
"What scares me is the market been so fragile. So, remember what happened in January? We got a whiff of bad news and all of the sudden the market is at 1800," Subramanian further said.
Investments during these uncertain times would have a profound effect on the market. Investors are searching for the right businesses to get into. When asked about which markets to consider, Subramanian mentioned the health and technology sectors as major areas to consider.
"They are both pretty cheap on a relative basis," she said.
"Health care has taken it on the chin because of Hillary, risk and fears that the M&A cycle is over," referring to the position taken by 2016 presidential candidate Hilary Clinton on the drug industry and health care.
Still, Subramanian says projects lesser risks and potential rewards for these two sectors despite their low performance at the market index. This is almost like saying that: "There's always light at the end of the dark tunnel."
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