After two weeks of roller coaster market, the US stocks volatility has become more and more intense, and the S&P 500 index has even seen the biggest drop since September 2022 and the biggest rebound since November 2022. In terms of product structure, the operating income of 10-30 billion yuan products was 401/1288/60 million yuan, respectively.

However, traders now only want to know one thing: Has the US stock market bottomed out?

Although no one can be sure, the market has brought some good news.

According to the latest report released by Goldman Sachs, on Thursday, the S&P 500 index rose above the mid-term threshold of 5254 points for CTAs (commodity trading advisors), which means that the current 15 billion US dollars of S&P 500 sell orders operated by CTAs will be reduced by half in the next five trading days, and the selling pressure in the next few days will be greatly reduced.

Goldman Sachs also pointed out that the S&P 500 has successfully regained the 100-day moving average of 5310 points and maintained this level when it opened on Thursday. The semiconductor stocks that fell sharply before rebounded more than 6% on Thursday.

In addition, corporations, asset management companies, sovereign funds, and hedge funds have bought high-quality defensive stocks in this week's market decline, and most demand has remained on the return even if they have to pay higher prices.

Goldman Sachs concluded that the current US stock market has bottomed out and the future market will have a trend of fluctuations but overall upward.

On July 16th, the S&P 500 index hit a historical high of nearly 5700 points, while the VIX index touched 65 on Monday. This situation has only happened twice before, during the global financial crisis in 2008 and in 2020.

Despite the current volatility of the US stock market, we do not believe that there is a situation as ominous as in 2008 or 2020.

JPMorgan: The worst period may have passed, but there is still downward risk in the US stock market.

Compared with Goldman Sachs, JPMorgan has taken a more cautious attitude, believing that the decline in US stocks may be more due to technical selling rather than fundamental factors, such as arbitrage trading reversal.

JPMorgan trader Andrew Tyler pointed out in the latest report that the fundamentals of the United States are still solid. Although the market is volatile, the weak July ISM manufacturing activity and non-farm report are not sufficient to cause such a large-scale price fluctuation. US economic data shows that actual GDP growth is still strong, and corporate revenue and profit growth exceed expectations.

Moreover, stock market corrections are a common phenomenon. According to statistics, the average occurrence of a 5% pullback in US stocks is three times a year, and a pullback of over 10% occurs about once. In the recent pullback, S&P's peak-to-trough fluctuation was -9.7%, and it was a 5% pullback in April. Goldman Sachs also pointed out that in the long run, entering the market when the S&P 500 pulls back 5% has been proven to be a very effective strategy.

Although the market has released signals of stabilization, JPMorgan pointed out that there is still some downward risk in the US stock market:

If the Fed's September interest rate decision disappoints the market, it may cause a negative reaction in the US stock market.

If the market fails to sustain buying, it may trigger more selling by CTAs and increase market downward pressure.

August and September are usually weaker periods in the market, and election years may prolong this trend due to policy uncertainty.

MOC (Market on Close) trading orders exceeded 7 billion US dollars for the second consecutive day on Wednesday, which may indicate that the market has greater volatility.

Overall, JPMorgan believes that the worst period may have passed, and the market may rise slightly from current levels, but more evidence is needed to confirm sustained economic growth. Large-cap, defensive, and cyclical sectors are worth watching.

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