On Monday, Allianz chief economic adviser Mohamed El-Erian (Mohamed El-Erian) said he believes a wave of corporate bankruptcies is the biggest risk of a rebound in US stocks. He said, “It is not political differences that influence stock market gains, but larger bankruptcies.”

When Erian made these comments, the Democrats and the Trump administration failed to reach an agreement on a new bailout plan, which prompted Trump to take a series of administrative measures over the weekend on issues including federal unemployment benefits and student loan payments.

Ellian pointed out that the market rebound in recent weeks was actually driven by technical indicators, which enabled US stocks to continue to rise even in the face of health incidents and other headwinds.

Erian has always been cautious about economic recovery. He said he is worried about the economic damage that a wave of bankruptcies may bring. “Bankruptcy will change from a short-term liquidity problem to a long-term solvency problem, and unemployment will become more difficult, and capital will depreciate. Trust me, if there is one thing the Fed's money can't help, it's a capital impairment incident.”

Ellian added, “The extent of the US economy's recovery from the health incident is leveling off. This still cannot stop the wave of bankruptcies. What we need is a V-shaped recovery.”