amid a sea of red in us stock markets on friday a fundamental shift in investors’ thinking is taking place one which analysts describe as a “growth scare”  a “growth scare” is characterized by a correction in anticipation of slowing economic growth even if such a slowdown hasn’t yet been borne out by the data dow industrials djia are poised for their longest streak of weekly losses in 90 years and the sp 500 spx appeared to be on track to close in bearmarket territory as investors flocked to treasurys and the dollar as safe havens of choice   friday’s broadbased selloff in equities punished every industry and every stock strategy from value and smallcap to growth as well as the consumerdiscretionary energy utilities financial and tech sectors economists at jpmorgan chase  co jpm estimate that us household wealth has fallen by 5 trillion to 8 trillion in 2022 driven largely by falling equity prices and bofa securities strategists ranked us equities as this year’s worstperforming asset class as well as the thirdbiggest loser among global stocks ahead of only chinese and german equities based on data through wednesday   prior rounds of us stock selloffs this year were largely driven by prospects of rising interest rates from the federal reserve which is attempting to stomp out the highest inflation in four decades while the risks of a recession or economic slowdown lingered in the backdrop they hadn’t been brought to the fore many in financial markets have remained confident the us can avoid a downturn or speak of recession risks in terms of the next one to two years   data released in april shows the us economy shrank 14 during the first quarter mainly because of a record us trade deficit following a 69 surge in gdp in the final three months of 2021 the national bureau of economic research defines a recession as a significant decline in activity lasting more than a few months   but deteriorating stock values and financial conditions may have the potential to hasten the anticipated arrival of an economic downturn according to some traders  “for a good portion of this year we saw a positive correlation between equities and bonds that is a selloff in equities and selloff on bonds” said subadra rajappa head of us rates strategy at société générale “now we’re seeing a rally in bonds correspond to a selloff in equities the subtle shift is that bonds are starting to act as safe haven suggesting a growth scare and the potential for demand destruction that leads to lower growth’’  “clearly this week’s price action in stocks stems from earnings guidance and forwardlooking guidance on consumer spending signaling the potential for a retrenchment’’ she said via phone still rajappa said she isn’t seeing any “concrete evidence” of a recession in the data though some slowdown in growth can’t be ruled out she also foresees no serious risk of recession in the next 12 months   as of friday there have been 59 negative earningspershare preannouncements issued by sp 500 companies for the second quarter and 32 that were positive according to refinitiv’s sp 500 earnings scorecard that compares with 55 that were negative and 28 which were positive a week ago  read sp 500 earnings are another potential shock’ awaiting financial markets trying to shake off stagflation fears economist  meanwhile the flight to safety in government bonds was felt most acutely in the longestterm maturities sending 10 tmubmusd10y and 30year rates tmubmusd30y below 28 and 3 respectively yields drop when demand for bonds goes up   the price action in bonds led to shrinking spreads between the 2year tmubmusd02y and 10year rates as well as between 5year tmubmusd05y and 30year rates which are seen as worrisome signs about the outlook in addition the 5year rate traded above the 10year yield inverting that part of the curve   meanwhile the ice us dollar index dxy rose 05 to 10324 not far from some of the highest levels in almost 20 years   over the past two years since the pandemic began us household wealth has increased by 30 trillion michael feroli jpmorgan’s chief us economist said via phone friday in a sense the market is “giving back a little bit from a period of strong gains and households are generally still probably sitting on unrealized gains over the past year” he said   jpmorgan isn’t yet forecasting a recession and expects us growth to remain positive through next year feroli said “but the risks are pretty elevated and over the next two years it’s a coin flip as to whether we go into a recession”