According to Odaily, strategists at Goldman Sachs have expressed confidence that the U.S. stock market is unlikely to enter a bear market within the next 12 months, as ongoing economic recovery is expected to support the market. The team, led by Andrea Ferrario, suggests that even with the risks associated with the presidential election, the probability of a market decline exceeding 20% is only 18%.
The S&P 500 Index surged nearly 25% in 2023 and has continued to rise by approximately 20% this year, with major technology stocks leading the gains. Despite an increase in bond yields this month, driven by uncertainties surrounding the Federal Reserve's easing cycle and the upcoming election, evidence of U.S. economic recovery has sustained the market's upward momentum. The strategists noted in their report that the stock market should be able to absorb higher bond yields as long as they are driven by improved economic growth.
While acknowledging recent signs of weakness, the strategists maintain that the economic environment remains favorable. They emphasize that the resilience of the stock market is supported by the broader economic recovery, which continues to provide a solid foundation for growth. The report underscores the importance of economic indicators in shaping market expectations and highlights the potential for continued gains in the stock market, provided that economic conditions remain supportive.
