I’m waiting for a potential -20% correction in U.S. equities next year. I’m waiting for Bitcoin to drop to $40,000–$50,000, and for gold to fall to $3,500 so I can add more—will these levels materialize?

More alarmingly, in a report released at the end of February, Goldman Sachs identified a sharp equity market correction as the single largest potential risk to the U.S. economy in 2026—and quantified its impact: a 10% pullback in the S&P 500 would shave 0.5 percentage points off GDP growth, bringing it down to 2.0%; a 20% decline could drag growth nearly one full percentage point below the baseline forecast. This '20%' threshold aligns precisely with your anticipated '20% U.S. equity correction.' Goldman Sachs, through systemic risk analysis, acknowledges that such a magnitude of decline is plausible—and if it occurs, it would transmit via the wealth effect into the real economy, potentially triggering a negative feedback loop that deepens the correction further. That said, Goldman Sachs maintains an overweight recommendation on equities over the next 12 months, advising investors to use near-term pullbacks as buying opportunities—i.e., it views the more likely scenario as a 'healthy,' cyclical correction rather than a systemic collapse. Whether U.S. equities actually reach that level hinges largely on one question: Will the U.S. economy enter recession in 2027? David Rosenberg, Chief Economist at Rosenberg Research and a well-known Wall Street 'bear,' argues that as fiscal stimulus fades and AI-related capital expenditures peak, the U.S. economy may plunge into a 'very severe recession' in 2027. He explicitly notes that after Americans receive their tax refunds this year, the economy may have only two to three more months of 'life support'—thereafter facing far steeper challenges, as the engines propelling growth simultaneously stall. Barclays’ model delivers a similar verdict: By mid-2027, the probability of a U.S. recession stands at 50%–56%. Senior economist Jonathan Millar states, 'The underlying pace of U.S. economic growth has already slowed to a level vulnerable to recession.' From a target-level perspective, a systemic 20% correction in U.S. equities would require recession expectations for 2027 to begin pricing in during the second half of this year. If elevated interest rates continue suppressing valuations, AI-driven earnings growth fails to justify current valuations, and recession signals accumulate, U.S. equities could indeed undergo a sharp adjustment between late 2026 and early 2027. Yet 'possible' does not equal 'inevitable'—historically, the timing of recession pricing has proven notoriously difficult to pinpoint; forecasting errors tend to be premature, not delayed. What markets are experiencing today resembles valuation adjustments under persistently high rates—not yet the full-blown, systemic recession pricing. Gold’s logic is undergoing a dramatic reversal. The earlier bull run in gold was primarily driven by central banks’ strategic gold purchases, de-dollarization narratives, geopolitical safe-haven demand, and market expectations of rate cuts. But following the blowout nonfarm payrolls report and April inflation rising to 3.8%, market rate expectations have fully reversed—gold is now under dual pressure from rising real yields and a stronger U.S. dollar. Citigroup noted explicitly in a prior report that gold faces significant downside in 2026–2027, with its base-case forecast calling for a gradual decline to $3,650 per ounce in 2026—driven by waning investment demand, improved global growth prospects, and fading Fed rate-cut expectations.

[Barclays] 2026 Outlook: Decoding the Game

1. Rare Earths and Critical Minerals as 'Geoeconomic Leverage' ・China controls roughly 70% of global rare earth refining capacity; its 2025 export tightening exerts pressure on the U.S. ・A short-term agreement between both sides—exchanging concessions on tariffs and other issues—confirms rare earths will remain a long-term bargaining chip. ・It will take Western nations several years to build alternative supply chains; this window grants China temporary pricing power. 2. Fiscal and Financial Risks ・Local government hidden debt and financing platform pressures remain substantial; the official fiscal deficit of ~4% masks a significantly larger actual shortfall. ・Hence, policy stimulus is more likely to be targeted and structural—not broad-based 'flood-the-system' easing. Conclusion: China is transitioning from a high-growth emerging economy toward a mature, medium-to-low-growth economy—bringing heightened volatility and uncertainty. Yet its valuation advantage and long-term growth potential continue to attract medium- to long-term investors. 3. Eurozone: German Stimulus Meets Structural Constraints Macroeconomic Assumptions (2026): ・GDP growth: ~1.1% ・Inflation: ~1.7% ・Unemployment rate: ~6.3% Key Points: 1. Germany’s €500 Billion 'Stimulus Package' ・Plans to deploy approximately €500 billion by 2037 for infrastructure modernization and energy transition; nearly one-fifth is expected to be spent in 2026. ・Defense spending exceeding 1% of GDP is excluded from deficit calculations—providing fiscal flexibility. ・Budget approval remains uncertain, but the direction breaks years of entrenched 'fiscal austerity.' 2. Limited and Uneven Growth Recovery ・Germany’s emergence from the 2024–2025 stagnation offers modest regional uplift. ・Spain’s previously strong growth is now moderating, offsetting part of the positive impact. ・U.S. tariffs and a strong euro erode export competitiveness, preventing a robust rebound in business sentiment. 3. Inflationary Forces in Tension ・Upward pressures (inflation): tariffs, German fiscal expansion ・Downward pressures (deflation): weak demand, muted wage growth, stronger euro, and 'export deflation' from China ・Barclays judges deflationary forces slightly dominant, expecting further slowdown in price gains in 2026. 4. Monetary Policy and Market Expectations Misalignment ・Markets currently expect the ECB to hold rates steady through most of 2026—but further rate cuts cannot be ruled out if external growth remains weak or German stimulus falls short of expectations. ・Thus, interest-rate futures’ implied path may face repricing—creating trading opportunities. 5. Political Uncertainty Remains a 'Permanent Fixture' ・France’s chronic inability to form stable majority governments impedes fiscal reform. ・Germany’s coalition government remains fragile; state elections in 2026 may amplify political noise. ・High debt burdens in Italy and France periodically reignite market concerns. ・Political risk remains a persistent discount factor for the eurozone—but also generates mispricing and tactical opportunities. 4. United Kingdom: Fiscal Austerity Amid Gradual Recovery Macroeconomic Assumptions (2026): ・GDP growth: ~1.4% ・Inflation: falling to 2.0% ・Unemployment rate: rising slightly to 5.0% ・Government debt/GDP: marginally below 93%

Barclays Cuts Target for Hawkins Stock to USD 141.00

Oct 20, 2026

Barclays reduced Hawkins' price target to $141 ahead of Q2 fiscal 2027 results. Investors await clarification on revenue growth and EPS in the upcoming report.

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