Goldman Sachs delivers a "reassuring pill": The risk of a US economic recession is very low, and it is unlikely that the US stock market will fall into a bear market
Goldman Sachs strategists believe that the risk of a US economic recession is low, so it is unlikely that US stocks will plummet by 20% or more. Although there may be a decline by the end of the year due to rising valuations and policy uncertainties, the likelihood of entering a bear market is small. Historical data analysis from Goldman Sachs shows that since the 1990s, instances of the S&P 500 Index falling by more than 20% have become rare. The strategy team remains tactically neutral and expects the Federal Reserve to cut interest rates by over 100 basis points by the end of 2024
According to the latest information from the Smart Finance app, Goldman Sachs strategists stated that the U.S. stock market is unlikely to plummet by 20% or more, as the risk of an economic recession remains low and the Federal Reserve is expected to cut interest rates.
Led by Christian Mueller Glissmann, the team mentioned that although the U.S. stock market may decline before the end of the year due to rising valuations, mixed economic growth prospects, and policy uncertainties, the likelihood of the stock market entering a bear market is small, as the economy is also supported to some extent by a "healthy private sector."
Furthermore, an analysis of historical data by Goldman Sachs' strategy team shows that since the 1990s, due to the extension of the business cycle, reduced macroeconomic volatility, and central bank "cushioning," occurrences of the S&P 500 index falling by more than 20% have become less frequent.
In a report on September 9th, they mentioned that they maintain a tactically neutral stance on asset allocation but "moderately support risk" over the next 12 months.
Amid concerns about an economic recession intensifying due to weak U.S. economic data, the S&P 500 index has retreated from the record high set in July. As investors await clear signals from the Federal Reserve's actions next week, the benchmark index continued to decline in September.
Futures data indicates that traders expect the Federal Reserve to cut interest rates by over 100 basis points by the end of 2024.
Statistics from another Wall Street major bank, Citigroup, show that investor positions leaned towards the bearish side last week, making it likely for further declines in major indices in the short term