The crisis in the stock market of the last few months meant that many of the papers most trusted by large and small investors lose a substantial part of their valuation.
The current debate focuses on two events: the persistence in the restriction of monetary policy marked by the Federal Reserve (Fed) to combat inflation and the consequent recessionary perspectives by the main banking and financial entities for the following months.
“The risks of a recession in the United States are now greater”, the Goldman Sachs warning
The 50 stocks to hedge against the recession in the United States according to Goldman Sachs
This mainly impacted technology companies. An example of this are Netflix, Square Inc. y Spotifywhich, according to data presented by IOL invested online, in the last year fell 65.6%, 55.78% and 48.2% respectively.
Swiss credit he explained it by saying that “the stock market sell-off has caused multiples to drop slightly above the 50-plus-year average.” The largest recalibration occurred around companies linked to internet services and social networks.
The decline of the S&P 500 in recent years.
“At the beginning of the year, the 100 most expensive stocks in the S&P 500 They were trading at a premium of 25.8 points to the rest of the market. After the correction, they are currently trading with a multiplier of 15.1″, analyzed the bank’s equity strategist Jonathan Golub.
“Cyclical valuations are giving very favorable numbers along with materials (XLB) and energy (XLE) companies trading at the greatest discounts in relation to the history“said the specialist according to the finance site Seeking Alpha.
BANK OF AMERICA put an end date to the recession and said how high the s&p 500 COULD SHOOT
Amid negative expectations, a surprise Bank of America report stipulates the possibility that if the S&P 500 continues to develop its downtrend long-term investors should prepare for big opportunities.
In a note published last Friday, the bank emphasized the fact that the stock market has entered its 20th bear market in the last 140 years, periods that have generally averaged a 37% “peak to trough” drop, lasting 289 days.
“Long-term investors should prepare for great opportunities”
“History is not a guide to future performance, but If it were, today’s bear market would end on October 19 with the S&P 500 at 3,000.Bank of America said. This would equate to a total drop of 38% and 18% from current levels.
The “good news” is that the average bull market lasts more than five years with a return of 198%stated Business Insider in an article published this Wednesday. “So you could estimate an S&P 500 at 8,900 for February 2028.”
An S&P 500 could be estimated at 8,900 by February 2028, Bank of America noted.
At those levels, Bank of America assured, investors should “fill up” on stocksas they would probably represent an attractive valuation as long as the economy does not fall into a deep and prolonged crisis.
An increase of that magnitude would result in the S&P 500 generating a six-year compound annual growth rate of about 15%.which is more than double the 7% historical average growth rate for the stock market (less inflation), according to calculations by Business Insider.
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