S&P 500 in correction mode: Financial expert predicts cloudy outlook for US stock markets

S&P 500 in correction mode: Financial expert predicts cloudy outlook for US stock markets

<

div>

According to a report by finanzmarktwelt.de, the stocks in the market-wide S&P 500 have been in a correction phase for three months. The index has already lost around 8% since its annual high on July 27th. This correction is influenced by interest rate concerns, rising yields and geopolitical risks such as the war in the Middle East. Barry Bannister, a renowned Wall Street bull who predicted the first half of the year's rally, is now pessimistic and doesn't expect big gains in US stock markets any time soon.

The S&P 500 Index is unlikely to rise above 4,500 points in the next six months as higher interest rates weigh on corporate profit growth, according to Bannister. Although the index rose slightly on Monday, it remains above the key technical level of 4,200 points. At the same time, the yield on 10-year government bonds was above 5% for the first time since 2007.

Bannister predicts that the S&P 500 will peak in the summer of 2023 and trade at around 4,400 by April 2024. He expects a normalized 10-year return of up to 6% in the mid-2020s.

Increasing concerns about returns and purchasing power of US consumers, as well as geopolitical risks from the war in the Middle East, have led to a sharp correction in US stock markets. These wiped out the increase at the beginning of the year. Bannister believes there will be little to no upside for US stocks over the next few years due to tighter financial conditions in the US.

The forecasts for the stock market are currently inconsistent. Some strategists expect further gains through the end of the year, while others predict further declines. Lori Calvasina of RBC Capital Markets says the outlook has become murkier and the correction to the S&P 500 rally is likely not yet complete.

Analysis and calculation of impacts:
Barry Bannister's bearish stance could have an impact on the stock market, particularly the US stock market. If investors believe his predictions, they may be inclined to reduce their investments or seek alternative asset classes. This could lead to further downward pressure on the S&P 500 and thus have a negative impact on the financial industry and the market.

However, it is important to note that forecasts are always subject to uncertainty and actual events may differ from expectations. So there is also the possibility that the market will develop differently than Bannister expected. It is therefore advisable to take different opinions and assessments into account and adapt your own investment strategy accordingly.

Source:
According to a report by finanzmarktwelt.de