We Currently Face A 20% Chance Of Recession

In a new report, Morgan Stanley analyst Ellen Zentner discussed the chances that the United States is on the verge of a recession. According to Zentner, market fears that a recession is imminent might be overblown.

“We first introduced a 2016 recession scenario in our Bear case in September 2015, assigning it a 20 percent probability,” she explained. “That assessment still feels about right.”

Related Link: Is Peter Schiff's Recession Thesis Coming True?

Digging Deeper

Despite forecasting only a one in five chance of a general recession, Zentner noted that the U.S. industrial segment, which represents about 10 percent of the overall economy, is already in a recession.

Although Morgan Stanley doesn’t see a recession coming this year, the firm’s 1.8 percent projected Q4/Q4 GDP growth rate is lower than consensus estimates.

Equity markets seem to be reflecting concerns over further economic weakness around the globe in 2016. Only three weeks into the year, the SPDR S&P 500 ETF Trust SPY is already down more than 7.0 percent.

Disclosure: The author holds no position in the stocks mentioned.