The stock market can collapse by 10%

S&P 500 approached the key resistance. JPMorgan advises investors to get rid of US shares. Barclays expect a 10% drop in the US market and without a recession. The S&P 500 stock index has approached the key resistance to the minimums of the first quarter, and its further dynamics will show whether the US shares growth from June minimums are something more than just the bear rally, Bloomberg notes. To preserve the bull mood, the S&P 500 must decisively break through above the area 4170-4180 points.

US shares ahead of growth other assets against the background of decreasing fears of recession. It’s time to sell American promotions and buy raw materials, according to JPMorgan. The bank draws attention to the decrease in the Bloomberg raw materials index, while the S&P 500 index has already increased by more than 13% of the minimums of June. The discrepancy in the dynamics gives investors the opportunity to change the composition of assets in the portfolio. JPMorgan does not expect a strong collapse of the American stock market in the near future. Most of the bad news, including weak economic data, Already taken into account in the prices of papers, and the shares will end a year much higher than current levels.

in Barclays expect the US Federal Reserve to be “soft landing”, but the stock market can still fall by 5-10% even without a deep economic recession. Among the main reasons for the decrease: worsening assessments by analysts, the fall in the income of the companies themselves and the transition of the population from the consumption of goods to the consumption of services, which will lower corporate profits. BlackRock also expect a decrease in S&P 500 by at least 10%, to 3600 points. Morgan Stanley and Bank of America believe that a sharp decrease in corporate profit will negatively affect the stock market in the next few months.

“If the native correction will delay the S&P 500 in the area below 4100 – for previous local minimums – in this case, investors should be ready, that the markets will not only return to the minimums of June, but also cherish them by directing the index in the direction of 3000”. Notes a FXPRO analyst team.

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