The narrative has shifted for equity market losses, from at first being about rising interest rates and tightening financial conditions, to now being also about growth/earnings worries as inflation erodes spending power and profits.

This via Reuters with updated JPM forecasts showing slower growth expected ahead:

  • H2 GDP 2.4% (from 3%)
  • H1 2023 1.5% (from 2.1%)
  • H2 2023 1% (from 1.4%)

JPM say there may be enough of a growth slowdown to lead to a gradual increase in the unemployment rate later in 2023, this will alleviate some of the wage pressures that have been building.

“In short, we forecast a soft landing, but are well aware that this outcome has rarely (if ever) occurred,”

SPX (weekly candles):

sp500 19 May 2022 2