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US stocks face potential declines if economic growth continues to slow and the Federal Reserve does not act quickly to ease monetary policy, according to Dubravko Lakos-Bujas of JPMorgan. Goldman Sachs notes that equity and credit valuations have recently fallen, and equities generally perform well after the Federal Reserve begins a rate-cutting cycle, unless growth is weak. The Chief Investment Officer of UBS highlights that historically, the S&P 500 Index has risen by about 17% on average over the 12 months following the start of a Federal Reserve easing cycle, provided there is solid growth. Despite concerns, Goldman Sachs suggests that a recession is unlikely, which typically drives bear markets.
There’s room for the #Fed to #cut rates if growth really does decelerate. A #recession is pretty unlikely, and generally it’s recessions that drive #bearmarkets, as that’s when #profits start to fall, notes @GoldmanSachs https://t.co/dURqEXrhoA
(#valuations got a bit frothy) It is likely that #volatility and the #correction have further to go. However, a prolonged #bearmarket is not likely, notes @GoldmanSachs https://t.co/n23lDstEzl
#Opinion | Welcome to the 'yes, but' cycle of rate cuts The global economy is on the cusp of a sustained easing, though not necessarily a dramatic sequence of rate cuts, writes @Moss_Eco #economy #interestrates https://t.co/MuBXVOQ3l1
