tl;dr
Goldman Sachs strategists, led by Christian Mueller-Glissmann, predict that a bear market in the US stock market is unlikely due to the strength of the private sector and potential supportive moves by the Federal Reserve. They attribute this to historical trends, longer business cycles, reduced macr...
Goldman Sachs strategists, led by Christian Mueller-Glissmann, predict that a bear market in the US stock market is unlikely due to the strength of the private sector and potential supportive moves by the Federal Reserve. They attribute this to historical trends, longer business cycles, reduced macroeconomic volatility, and proactive interventions by central banks. Additionally, they expect the Federal Reserve to cut interest rates, easing market pressure. While a dip in the stock market is possible by year-end, the overall outlook remains cautiously optimistic.
However, the cryptocurrency market is showing signs of a potential bear market, with experts noting declining demand for Bitcoin and the possibility of a drop below $40,000. This suggests that while the US stock market appears resilient, the cryptocurrency sector may face headwinds in uncertain economic conditions.
Goldman Sachs strategists have weighed in on the current state of the US stock market, predicting that a bear market—a decline of 20% or more—is unlikely. Despite high valuations, mixed growth prospects, and lingering policy uncertainty, the team led by Christian Mueller-Glissmann highlights the strength of the private sector. It anticipates supportive moves from the Federal Reserve as key factors preventing a market plunge.
Mueller-Glissmann’s analysis draws from historical trends. Since the 1990s, the frequency of significant downturns in the S&P 500 has decreased. This is due in part to longer business cycles, reduced macroeconomic volatility, and proactive interventions by central banks. These elements create a buffer that minimizes the risk of a deep bear market. Additionally, Goldman Sachs expects the Federal Reserve to begin cutting interest rates, which could ease some pressure on the markets. While the stock market may still see a dip by year-end, the overall outlook remains cautiously optimistic. The strategists maintain a neutral stance on asset allocation but carry a “mildly pro-risk” view for the next 12 months.
Contrary to the stock market outlook, the cryptocurrency market is showing signs of a potential bear market. Julio Moreno, Lead Analyst at CryptoQuant, notes that Bitcoin is struggling due to declining demand. "All valuation metrics are in bearish territory," Moreno said.
Veteran trader Peter Brandt adds that there’s a 65% probability Bitcoin could drop below $40,000, though he remains optimistic about a long-term price surge, potentially reaching $130,000 by 2025. "In early June I was assigning a 50% probability of $30,000 (approximately a 50% price decline) and a 50% chance of $140,000 (approximately a doubling of price). Since June my technical price indicators have been stacking up in favor of the $30,000 probability," Brandt said.
In conclusion, while the US stock market appears resilient, the cryptocurrency sector may face headwinds as investors navigate uncertain economic waters.
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Technical Analysis: Unveiling Market Trends
Key Takeaways:
- The S&P 500 index has approached a critical resistance level at 4,200, indicating a potential breakout towards new highs.
- The 50-day moving average has crossed above the 200-day moving average, signaling a bullish trend for Apple (AAPL) stock.
- The Relative Strength Index (RSI) for Tesla (TSLA) has entered overbought territory, suggesting a possible correction in the short term.
- Gold futures are testing a significant support level at $1,800, with a potential downside breakout looming.
Remember, while these indicators provide valuable insights, it's essential to consider the inherent risks and the dynamic nature of the market.