(Reuters) – Barclays on Monday reduced its goal at the end of the year for the European Stoxx 600 index for the second time in less than a month, as escalating US trade tensions and tariffs fueled recession fears.
Brokering has reduced its goal for the European benchmark index to 490 out of 580, but warned that “setting up a point forecast is low at this stage – there is no precedent, nor a fundamental framework to rely on this crisis.”
European actions have dropped to a 16-month low on Monday, amid global markets, as President Donald Trump stands firmly on his tariff plans and investors betting that the risks of recession could cause a decrease in the US rate in May.
Barclay warned that the Stoxx 600 index could be lowered to 390 points as the worst scenario, but it could also return to about 550 if trade tensions de -escalate quickly enough to avoid recession.
The index was last closed to 496.33 points on Friday.
“We think the global capital will probably not return to recent highs soon, because great damage has been done,” said Barclay strategists, led by Emanuel Ka.
Cau’s forecast comes when global brokers increase the risk of recession risks, with PPMorgan assessing a 60% chance for an American and global recession, while Goldman Sachs projects the chances of 45%.
Barclays also turned “overweight” to the UK Index in the UK, FTSE 100, noting that stagnation concerns could be of benefit to the index as a result of tilt to defensive stocks, and upgraded the European health sector to “market weight” and reduced the market for the market. “Weight weight”.
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