Goldman strategists see slim chances of a post-election bear market

Goldman strategists see slim chances of a post-election bear market
Despite recent weakness clouding the economic environment, the team expects stocks will be able to digest higher bond yields.
NOV 05, 2024
By  Bloomberg

The US stock market is unlikely to head into a bear market in the next 12 months, with a resilient economy continuing to support equities, according to Goldman Sachs Group Inc. strategists.

A team led by Andrea Ferrario see just an 18% chance of a decline of more than 20% for stocks — which would constitute a bear market — even when taking into account the risks posed by Tuesday’s presidential election.  

The S&P 500 has gained about 20% this year after surging nearly 25% in 2023, led by soaring megacap technology stocks. Evidence of a resilient US economy has kept the rally afloat, though bond yields have pushed higher this month amid doubts about the depth and extent of the Federal Reserve’s easing cycle as well as election uncertainty.

“Equities should be able to digest higher bond yields as long as they are driven by better growth,” the Goldman strategists wrote in a note, though they warned there is a possibility of a burst of volatility in the aftermath of the US vote. 

The economic environment remains friendly despite recent signs of weakness, the strategists said. Job growth slowed to the weakest pace since 2020 in October, a month distorted by severe hurricanes and a major strike, and the path to cooler inflation continues to prove bumpy, recent data show.

Still, the economy expanded at a robust pace in the third quarter, continuing several quarters of solid growth, and the unemployment rate has remained low.

Latest News

Maryland bars advisor over charging excessive fees to clients
Maryland bars advisor over charging excessive fees to clients

Blue Anchor Capital Management and Pickett also purchased “highly aggressive and volatile” securities, according to the order.

Wave of SEC appointments signals regulatory shift with implications for financial advisors
Wave of SEC appointments signals regulatory shift with implications for financial advisors

Reshuffle provides strong indication of where the regulator's priorities now lie.

US insurers want to take a larger slice of the retirement market through the RIA channel
US insurers want to take a larger slice of the retirement market through the RIA channel

Goldman Sachs Asset Management report reveals sharpened focus on annuities.

Why DA Davidson's wealth vice chairman still follows his dad's investment advice
Why DA Davidson's wealth vice chairman still follows his dad's investment advice

Ahead of Father's Day, InvestmentNews speaks with Andrew Crowell.

401(k) participants seek advice, but few turn to financial advisors
401(k) participants seek advice, but few turn to financial advisors

Cerulli research finds nearly two-thirds of active retirement plan participants are unadvised, opening a potential engagement opportunity.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today’s choppy market waters, says Myles Lambert, Brighthouse Financial.

SPONSORED Beyond the dashboard: Making wealth tech human

How intelliflo aims to solve advisors' top tech headaches—without sacrificing the personal touch clients crave