BlackRock, the world’s largest asset manager, says that the Great Moderation, a decades-long period of stable growth and declining or low inflation, is over. “We think this Great Moderation period – that I’ve seen spent my entire career in – looks over to us,” said Vivek Paul, head of portfolio research at the BlackRock Investment Institute. “It looks like we’re in an environment where volatility is just structurally going to be higher.” In other news, the Dow dropped more than 500 points on Thursday morning. Also, JPMorgan Chase reported that its earnings fell 28% in Q2. CEO Jamie Dimon warned about troubled times ahead. He said that geopolitical tensions, high inflation, and rising interest rates are “likely to have negative consequences on the global economy sometime down the road.”

 

Yahoo News/Julie Hyman
The ‘Great Moderation’ is over and inflation has triggered a new regime: BlackRock

There has been a seismic, fundamental shift in the economic and markets regime that has dominated the U.S. – and much of the globe – for the past three decades.

Or so says BlackRock, the world’s largest asset manager, in its midyear outlook.

The Great Moderation is over, the firm argues, referring to a decades-long period of stable growth and declining or low inflation. And recent data clearly points to a change in the landscape with inflation rising 9.1% in June, according to the latest data from the BLS.

You can read the full article, here.

 

CNBC/Samantha Subin and Carmen Reinicke
Dow slumps 500 points as traders worry about larger rate hikes, JPMorgan falls after earnings

Stocks tumbled Thursday as big bank earnings season commenced and traders assessed the possibility of even tighter U.S. monetary policy on the back of June’s hot inflation report.

The Dow Jones Industrial Average shed 558 points, or 1.82%, while the S&P 500 dropped 1.79%. The Nasdaq Composite tumbled 1.71%.

Earnings results from major banks on Thursday offered further clues into the health of the U.S. economy. JPMorgan Chase slipped more than 4% after reporting quarterly earnings that missed analyst expectations and halted buybacks. Morgan Stanley also dipped following a miss on the top and bottom lines. Goldman Sachs also slipped 3.7%.

Continue reading, here.

 

Reuters via U.S. News/Noor Zainab Hussain and David Henry
JPMorgan Suspends Buybacks, Warns on Global Economy as Profit Slumps

JPMorgan Chase & Co reported a bigger-than-expected 28% fall in quarterly profit and suspended share buybacks on Thursday, as America’s largest bank set aside more money to cover potential losses in the face of growing risks of a recession.

Chief Executive Jamie Dimon stressed the need to build capital reserves, while flagging a number of concerns including the war in Ukraine, high inflation and the “never-before-seen” quantitative tightening as threats to global economic growth.

Closer home, however, the economy continues to grow and both the job market and consumer spending remain healthy, Dimon said.

JPMorgan’s shares slid more than 4% as the bank recorded $1.1 billion in provision for credit losses compared with last year when it released $3 billion from its reserves.

Keep reading, here.

 

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