לאַגער מאַרק ברייסאַז פֿאַר 'וואַלאַטאַל' טריידינג אין קומענדיק וואָכן - דאָ ס ווי פיל די S&P קען טאַנק

Although investors have cheered data signaling inflation appears to have peaked, “there hasn’t been much of a change” in the Fed’s commitment to reigning in prices by slowing down the economy, Brian Price of Commonwealth Financial Network said on Thursday, pointing to the central bank’s hawkish policy מעלדן this week as evidence.

As stocks tanked, Price warned markets might be prone to “wider swings” in the last two weeks of the year given the absence of important economic data releases—fueling uncertainty over the state of the economy.

What follows may be worse: In a Tuesday note, Morgan Stanley analysts warned “the high risk” of an earnings recession could push the S&P 500 down to 3,000 points some time in the first quarter, erasing as much as 24% in value as the effects of aggressive Fed policy ripple through the economy and hamper corporate earnings.

The analysts believe companies will start cutting profit expectations during the fourth-quarter earnings season beginning in mid-January and running through February—ushering in the steep market decline as companies start to face lower sales in addition to higher costs.

Morgan Stanley’s Katy Huberty acknowledges the call is “widely viewed as too aggressive” by other Wall Street analysts, but the investment bank also correctly predicted this year’s bear market and holds a year-end price target of 3,900—roughly in line with current levels.

“Things will get worse before they get better,” says Bank of America analyst Savita Subramanian, positing the S&P will fall a less-severe 14% to 3,400 by next summer as corporate earnings fall between 10% to 15%.