On November 6, Caixin reported (edited by Bian Chun), currently, states across the USA are gradually ending election voting and starting the counting process, with the final results still pending. Goldman Sachs recently mentioned that investors may feel nervous about the election-related volatility, but the market conditions are good, which can help avoid a significant drop into the bear market area after the election voting.

Goldman Sachs analysts believe that the likelihood of a stock market decline of more than 20% - a signal of the start of a bear market - is only 18%. They pointed out that a healthy economy continues to drive this year's stock market rally.

"Despite recent weak macro data (partly due to last month's strikes and hurricanes), the favorable macro background in the USA should limit the risks of a bear market." Analysts stated in a report on Monday.

They mentioned that even if bond yields rise significantly after the election, the stock market should continue to perform well. However, a quicker rise in bond yields or real yields may bring greater risks.

"As long as economic growth accelerates, the stock market should be able to digest higher bond yields. However, if real yields (relative to expected real GDP growth) begin to rise, or if bond yields rise too quickly, the rise in bond yields may eventually restrict the stock market's rise," analysts said.

Analysts and economists believe that if Trump wins, bond yields may rise, which would be a disadvantage for the stock market. Trump's proposed comprehensive tariffs and mass deportations plan may lead to inflation and potentially make it harder for the Fed to continue easing monetary policy.

Analysts also stated that on the other hand, if Harris wins the U.S. presidency, while both parties separately control the two houses of Congress, it may lead to a decline in bond yields.

The Federal Reserve began an aggressive rate cut cycle in September this year with a 50 basis point reduction, and it is widely expected that the central bank will cut rates by another 25 basis points this month.

However, the path of the subsequent easing cycle is somewhat uncertain. Some strategists warn that the Federal Reserve may pause rate cuts in December or early next year. However, some analysts still believe that with the economic slowdown and soft labor market, the Federal Reserve may significantly cut rates again.

As Goldman Sachs analysts predict that the U.S. stock market will avoid a bear market, the S&P 500 index has surged more than 21% this year, marking the continuation of a bull market for over two years.

U.S. stocks surged significantly on Tuesday, experiencing a broad rebound. Prior data indicated a stable economy, but with the ongoing presidential election, investors are prepared for trading volatility this week. The S&P 500 index rose by 70.07 points, up 1.23%, to 5782.76 points.

The preliminary voting results from most states in the United States will be released around noon Beijing time today, but the counting of the 'swing states' that will ultimately decide the election results may take a day or even several days. If the election outcome remains unclear in the coming days, the market is likely to experience volatility related to the election.

Editor/ping