Yahoo Finance Live anchors discuss slowing growth and where Goldman Sachs puts the chances of a recession.

Video Transcript

BRIAN SOZZI: Well, let's stay on the bad news. Goldman Sachs is reiterating its 35% probability for a recession within the next two years. A new note from strategist David Kostin also said macro factors are outweighing a strong earnings season and estimate boost. He goes on to write this-- "the boost to analyst estimates has not been enough to offset portfolio manager fears about the downside risk to EPS if the economy falls into recession and the downside risk to valuations as the Fed tightens policy". Now, guys, I don't want to blame Kostin for this pre-market sell-off. Last week's market action was just not good at all. But still, this is probably one of the more upbeat strategists on Wall Street saying, hey, guys, listen, earnings season has come out pretty well, but we're now starting to see estimates come down, and you're seeing the market act accordingly. And that's a big red flag.

JULIE HYMAN: One of the other things he mentions is that even if we don't get a recession, that doesn't mean blue skies for stocks. And I think that's also what spooks people in this market as well, is that there's all this recession talk. And he's saying, well, recession isn't the only problem that we have here.

BRAD SMITH: Yeah, and just briefly here as well. Swings will remain large until the path of inflation is clear. With that comment, I mean, we've already seen the impact that these price swings and the volatility have also had among some of the retail investors out there. And if you see a broad move from some of those retail investors stoked by fear out of the markets, what in terms of the momentum trade does that also set up in the near future too?

JULIE HYMAN: Just one more call I wanted to mention this morning. You can't just lay it all at Kostin's feet. Michael Hartnett over at Bank of America, maybe he can take a little bit of the blame for the negative sentiment, or is at least is another reflection of the negative sentiment. He says the S&P 500 is moving closer to a bear market plunge, which, of course--

BRIAN SOZZI: That doesn't sound positive.

JULIE HYMAN: would be at least 20%. He says the 19 bear market plunges that occurred over the past 140 years last on average 289 days. That means we've got until October 19 if we, indeed, are going to enter a bear market.