Source: WiseFinance.

Goldman Sachs strategists believe that the US stock market is unlikely to enter a bear market in the next 12 months, as economic recovery will continue to support the stock market. A research group led by Andrea Ferrario believes that even considering the risks brought by the presidential election on Tuesday, there is only an 18% chance that the stock market will fall by more than 20% and constitute a bear market.

$S&P 500 Index (.SPX.US)$ It has risen by about 20% this year, following a nearly 25% surge in the index in 2023, led by surging large technology stocks. Evidence of the US economic recovery supports this uptrend, although doubts persist about the depth and breadth of the Federal Reserve's accommodative cycle, coupled with the uncertainty of the US elections, leading to a rise in bond yields this month.

Goldman Sachs strategists wrote in a report: "As long as driven by stronger economic growth, the stock market should be able to digest higher bond yields." However, they warn that after the US elections, the stock market may experience sharp fluctuations.

Strategists point out that despite recent signs of weakness, the economic environment remains favorable. Recent data shows that due to the impact of severe hurricanes and major strikes, October job growth slowed to the lowest level since 2020, while the path to cooling inflation remains bumpy.

Nevertheless, the US economy expanded at a strong pace in the third quarter, continuing its robust growth for several consecutive quarters, with the unemployment rate remaining low.

Editor / jayden