HomeTop U.S. NewsBCA Research Analyst Predicts Deep Recession, S&P 500 to Drop By 30%

BCA Research Analyst Predicts Deep Recession, S&P 500 to Drop By 30%

The U.S. stock market has been thriving lately, with stocks reaching record highs in May. But according to BCA Research chief global strategist Peter Berezin, things could soon change for the worse.

In a recent note sent to clients, Berezin predicted that the economy of the United States is heading toward deep recession. He expects that the recession will take place either in the upcoming months or early 2025.

If the recession ends up happening, Berezin expects that the S&P 500 will drop to 3,750 points. Based on Friday’s close of 5,460.48, that would mark more than 30% skid.

According to Berezin, the main driving factor for the recession will be a slow labor market. With the rising unemployment, consumers will curb their spending as their savings will be threatened, and lines of credit will be less available. This will lead to even less hiring, while businesses will scale down on expansion due to weakened demand. 

“The reason the U.S. avoided a recession in 2022 and 2023 was because the economy was operating along the steep side of the Phillips curve,” Berezin wrote in the note. “When the labor supply curve is nearly vertical, weaker labor demand will mainly lead to lower wage growth and falling job openings. In other words, an immaculate disinflation.”

It is important to note that other Wall Street market strategists don’t have such bleak predictions when it comes to the U.S. economy and stock market.

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