Morgan Stanley: If the number of initial jobless claims in the United States continues to rise, concerns about economic recession may weigh on risk assets

The continuous increase in initial jobless claims in the United States may trigger concerns about economic recession, suppressing risk assets. Marko Kolanovic, Chief Market Strategist at Morgan Stanley, stated that the current prices of all risk assets reflect a "very small" expectation of an economic recession. While the valuation of small-cap stocks implies a "quite limited" possibility of an economic recession, the valuation of the S&P 500 index suggests a 0% possibility of an economic recession. If initial jobless claims continue to rise, concerns about economic recession may resurface