Jan 11, 2019

The market is pricing in a 50% chance of recession

The Fearless Girl statue outside the New York Stock Exchange. Photo: Spencer Platt/Getty Images

The market is showing a roughly 50% chance of a recession over the next year, according to Goldman Sachs' economic research team.

Why it matters: They watch two market measures — the slope of the yield curve and credit spreads. Both "now indicate sharply higher recession risk than a few months ago," the team noted. But the researchers added they are not sold on a recession. "In our view recession risk remains fairly low, in the neighborhood of 15% over the next year." Goldman analysts predicted the S&P 500 would finish the year at 3000 in its 2019 outlook — 500 points above where it finished 2018.

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Concern over coronavirus spread: Italy, South Korea and Iran report more cases

Data: The Center for Systems Science and Engineering at Johns Hopkins, the CDC, and China's Health Ministry. Note: China numbers are for the mainland only and U.S. numbers include repatriated citizens.

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The big picture: As South Korea and Italy stepped up emergency measures amid rising case numbers, World Health Organization officials expressed concern about infections with no clear link to China. COVID-19 has killed at least 2,619 people and infected almost 80,000 others, with all but 27 deaths occurring in mainland China.

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Former Vice President Joe Biden secured second place in the Nevada Democratic caucuses with former Southbend Mayor Pete Buttigieg third, according to NBC News projections Sunday.

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