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Goldman Sachs sees bear market as unlikely amid strong private sector

Goldman Sachs sees bear market as unlikely amid strong private sector

GrafaGrafa2024/09/12 07:35
By:Mahathir Bayena

Goldman Sachs strategists suggest a bear market is unlikely for the US stock market, despite concerns over high valuations and mixed growth prospects. 

Led by Christian Mueller-Glissmann, the team points to the resilience of the private sector and potential supportive measures from the Federal Reserve as key elements that could help avoid a significant downturn. 

Their analysis relies on historical trends showing that the frequency of severe declines in the S&P 500 has decreased since the 1990s. 

This trend is largely due to longer business cycles, reduced macroeconomic volatility, and proactive interventions by central banks, which have provided a buffer against deep bear markets. 

Additionally, Goldman Sachs expects the Federal Reserve to potentially cut interest rates, a move that could alleviate some market pressures and bolster investor confidence. 

Despite this cautiously optimistic outlook for stocks, Goldman Sachs maintains a neutral position on asset allocation but expresses a "mildly pro-risk" perspective for the next 12 months. 

In contrast, the cryptocurrency market shows signs of potential weakness. 

Julio Moreno, Lead Analyst at CryptoQuant, notes that Bitcoin (CRYPTO:BTC) is facing challenges due to declining demand. 

"All valuation metrics are in bearish territory," Moreno observed, highlighting the difficult period ahead for Bitcoin. 

Veteran trader Peter Brandt echoes this sentiment, estimating a 65% chance that Bitcoin could fall below $40,000. 

Nevertheless, he remains optimistic about Bitcoin's long-term prospects, predicting it could surge to $130,000 by 2025. 

Brandt explained, “In early June I was assigning a 50% probability of $30,000... and a 50% chance of $140,000... Since June my technical price indicators have been stacking up in favor of the $30,000 probability.” 

Goldman Sachs views the stock market as fairly stable, with limited risk of a major downturn. 

On the other hand, the outlook for cryptocurrencies is less clear, as investors continue to navigate a landscape of volatility and changing demand. 

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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