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

The 2025 InvestmentNews Awards Excellence Awardees revealed
The 2025 InvestmentNews Awards Excellence Awardees revealed

From outstanding individuals to innovative organizations, find out who made the final shortlist for top honors at the IN awards, now in its second year.

Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty
Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty

Cresset's Susie Cranston is expecting an economic recession, but says her $65 billion RIA sees "great opportunity" to keep investing in a down market.

Edward Jones joins the crowd to sell more alternative investments
Edward Jones joins the crowd to sell more alternative investments

“There’s a big pull to alternative investments right now because of volatility of the stock market,” Kevin Gannon, CEO of Robert A. Stanger & Co., said.

Record RIA M&A activity marks strong start to 2025
Record RIA M&A activity marks strong start to 2025

Sellers shift focus: It's not about succession anymore.

IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients
IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients

Platform being adopted by independent-minded advisors who see insurance as a core pillar of their business.

SPONSORED Compliance in real time: Technology's expanding role in RIA oversight

RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.

SPONSORED Advisory firms confront crossroads amid historic wealth transfer

As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.