JPMorgan shares 4 charts that put the banking crisis into perspective — and show why the tech recession may already be over
But JPMorgan Private Bank's Jacob Manoukian says investors shouldn't let the noise distract them.With the recentdrawing comparisons to the Global Financial Crisis, the stakes have never been higher for the Federal Reserve than they were during this week's FOMC meeting.
After embarking on a rapid rate-hiking cycle starting last March, the US central bank now has to walk a delicate tightrope betweenwhile simultaneously reigning in runaway inflation. In a year almost certainly fated to end in recession, the turbulence currently roiling the financial industry might seem, at least on the surface, catastrophic for markets.
But while it's certainly understandable that any parallels to the 2008 recession may shake investors, it's also important to keep in mind that short-term market fluctuations can oftentimes"In an average year, the stock market sees a close to 15% peak-to-trough decline. Currently, the year-to-date drawdown is 8%.
"Such companies are often unprofitable, speculative and digitally enabled," Manoukian wrote."They soared during lockdowns, when lives moved online and interest rates were extremely low. But now, under the opposite conditions , investors are far less enthusiastic, capital markets have largely been closed to them, and fundraising has become difficult," he wrote.
Even with daunting odds ahead, investors should keep their long-term goals and investment plans in mind to prevent making any rash decisions during any short-term selloffs."While there could be more strain ahead, policymakers have the tools to mitigate a great deal of risk and point to a clearer path forward. Coming back to that long-term mindset can do the same for you," Manoukian concluded.Sign up for notifications from Insider! Stay up to date with what you want to know.
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