Goldman Sachs analysts suggest a bear market is unlikely despite recent market volatility driven by high valuations, earnings concerns, and global economic shifts.
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As the Market continues to become volatile leading into the upcoming presidential election, analysts from Goldman Sachs think it is unlikely we will see a bear market. A recent correction has been seen due to several factors, pointed out by the wall street firm, which began amid high valuations and elevated expectations for Q2 earnings. US employment report data showing a rise to 4.3% increased fear in the market which built upon the downside seen in the market. Not only this but a large unwind of carry trades, made by a 10% rise in the Yen versus the Dollar and a collapse in Japanese stocks, has contributed to the market turmoil. Elevated expectations for earnings have also made investors skittish in holding positions in large tech companies missing their highly inflated earning projections. Valuations remain elevated, specifically the S&P 500 which has a current PE ratio above 20x. Investors will keep their eye on the presidential debate tonight, where Kamala Harris and Donald Trump will have their first time face to face.
