If Recession Ensues, How Low Can The Nasdaq Go 如果经济衰退，纳斯达克能跌多小

US and China raised tariff against each other's products this past Sunday; US manufacturing PMI reported below 50 and 2 year and 5 year yield inverted; there are more and more talk about recession.
Other recession signals are also starting to appear: S&P 500 earnings estimate slow to 164.53, this is the lowest level since December 2018's 173.21; Economic Policy Uncertainty index hit all time high in June to 342; Q2 gross private domestic investment tumble 5.5%, the worst since Q4 2015. Just how bad the stock market can do if there's a recession? We can use the last 2 recessions as references:
The 2000 to 2002 Dot Com Bubble burst recession, the high tech index Nasdaq Composite dropped 78% and the 2007 to 2009 Subprime Mortgage Crisis and the ensuing collapse of the US housing bubble burst recession , the same index dropped 56%. The average Nasdaq Composite drop is 67% during the last two recessions. Assuming the coming recession only drop the Nasdaq Composite by 50%, the index may drop to 4200! Don't ignore this comparison. Global economy has too much risk and on verge of recession, it doesn't make sense that the Nasdaq composite is only below its all time high level by 5.6%. 50% down from all time high may be aggressive but 10 to 20% down is very reasonable. For 10% and 20% down, the Nasdaq Composite level would be 7506 and 6672 respectively. Following are today's market news and analyst comments:


。Tariffs on $112 billion of Chinese goods kicked in on Sunday. This round of duties target many everyday grocery items and household staples, which could cost the average American household $1,000 a year, J.P. Morgan estimated.

。The manufacturing ISM manufacturing index PMI was at 49.1% in August, down from 51.2% in July. The employment index was at 47.4%, down from 51.7% last Month, and the new orders index was at 47.2% , down from 50.8%. They are all below 50% indicating economic contraction.

。UBS' chief economist Seth Carpenter eyes the Trump admin' latest trade war round which includes an additional 5% of tariffs on previously announced or enacted tariffs, and claiming that "tariffs have taken a heavy toll and the latest escalation is substantial" . UBS forecasts real GDP Growth to be about 1.8% in, a modest deceleration from the growth in Q3, but still about in line with the Fed's estimate of potential growth. Things, however, get ugly fast in 2020, when the Swiss Bank now expects GDP to slow notably To 0.5% in Q1 and decelerates further to 0.3% in Q2.

。Morgan Stanley’s Chief Market Strategist Mike Wilson, one of Wall Street’s most skeptical strategists, is advising clients to dump growth stocks and buy defensive names, saying “demand destructive” tariffs are fanning recession fears.

。According to Peter Schiff, the chief global strategist at Euro Pacific Capital, it was a "huge mistake" for the Federal Reserve to cut interest rates last month. Schiff says there is no way for the Federal Reserve to stops the United States from going into a recession. According to Schiff, it's impossible to build a viable economy on the back of artificially low interest rates. "All it accomplishes it to push up asset prices, creating bubbles and malinvestments that hurt the economy. Relying on low interest rates for growth Make it certain that recessions will ensue when monetary policy tightens,” he added.

美国和中国在上周日对彼此的产品征收关税;美国制造业PMI报告低于50和2年及5年国债回报率倒挂;经济衰退之声越来越响亮。 其他衰退信号也开始出现：标准普尔500指数盈利预估放缓至164.53，这是自2018年12月的173.21以来的最低水平;经济政策不确定性指数在6月创下历史新高至342; 第二季度国内私人投资总额下跌5.5％，为2015年第四季度以来的最低水平。如果出现经济衰退，股市有多糟糕？我们可以使用最后两次经济衰退作为参考：2000年至2002年的互联网泡沫破裂导致萧条，高科技指数纳斯达克综合指数下跌了78％，而2007年至2009年的次级抵押贷款危机以及随后美国房地产泡沫破裂的崩溃，同样的指数下跌了56％。在过去两次经济衰退期间，纳斯达克综合指数的平均跌幅为67％。假设即将到来的经济衰退只使纳斯达克综合指数下跌50％，该指数可能跌至4200！不要忽视这样的比较。 在全球经济濒临衰退的风险大的情况下，纳斯达克综合指数仅低于历史最高水平5.6％是不合理的。 从历史最高点下跌50％可能是激进点，但下跌10％至20％是非常合理的。纳斯达克综合指数下跌10％和20％的水平分别为7506和6672。下面是今天的市场消息与分析师评论：

。周日，有1120亿美元的中国商品关税开始征收。 J.P. Morgan估计，这一轮关税针对的是许多日常杂货和家庭主食，这可能使美国家庭平均每年花费多1000美元。

。8月制造业ISM制造业指数PMI为49.1％，低于7月份的51.2％。就业指数为47.4％，低于上月的51.7％，新订单指数为47.2％，低于50.8％。他们都低于50％显示经济萎缩。

。瑞银的首席经济学家赛斯卡彭特Seth Carpenter关注特朗普管理层的最新一轮贸易战，其中包括对先前宣布或颁布的关税增加额外5％的关税，并声称“关税已经造成重大损失，最近的升级是实质性的”。瑞银预计实际GDP增长率约为1.8％，与第三季度的增长相比略有减速，但仍与美联储对潜在增长的预测一致。然而，在2020年事情将变得非常丑陋，瑞士银行预计GDP将明显放缓至第一季度的0.5％，并在第二季度进一步减速至0.3％。

。摩根士丹利的首席市场策略师迈克威尔逊Mike Wilson是华尔街最持怀疑态度的策略家之一，他建议客户抛售增长股并购买防预性股票，称“需求破坏性”关税正在煽动经济衰退的担忧。

。据欧洲太平洋资本（Global Pacific Capital）首席全球策略师彼得•席夫（Peter Schiff）称，上个月美联储降息是一个“巨大的错误”。席夫说，美联储无法阻止美国陷入衰退。 Schiff认为，在人为的低利率背景下建立一个可行的经济是不可能的。 “所有这一切都只是推高资产价格，制造泡沫和损害经济的不良投资。依靠低利率促进增长确保货币政策收紧时会出现经济衰退，”他补充道。