"The chances of the US stock market crashing is far greater than many financiers believe, the head of America's largest bank has said. Jamie Dimon, who is the chair and chief executive of the giant Wall Street bank JPMorgan Chase, said he was far more worried than others about a serious market correction, which he predicted could come in the next six months to two years."
"Dimon added there were a lot of things out there creating an atmosphere of uncertainty, pointing to risks including the geopolitical environment, fiscal spending and the remilitarisation of the world. All these things cause a lot of issues that we don't know how to answer, he said. So I say the level of uncertainty should be higher in most people's minds than what I would call normal."
"On Wednesday, the head of the International Monetary Fund, Kristalina Georgieva, said the world economy had shown surprising resilience in the face of Donald Trump's trade war, but issued a stark warning about the mounting risks, saying: Buckle up: uncertainty is the new normal. Before anyone heaves a big sigh of relief, please hear this: global resilience has not yet been fully tested. And there are worrying signs the test may come, she told an audience at the Milken Institute in Washington."
The probability of a serious US stock market correction is substantially higher than commonly priced, with an estimated likelihood near 30% versus a market-implied 10%. A major correction could occur within six months to two years. Key risk drivers include geopolitical tensions, elevated fiscal spending, and global remilitarisation, all contributing to elevated uncertainty. Global economic resilience has not yet been fully tested, and warning signs indicate that the test may come. High valuations in AI-related companies and growing bubble concerns increase the risk of a sudden market correction.
Read at www.theguardian.com
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