With a wide variety of stocks facing substantial correction, benchmark indices being hard-pressed to the point the Dow Jones Industrial Average (DJIA) at one point threatened to turn red, and inflation reheating, fear of a looming recession has returned to the market.
Despite the downturn and the mounting concerns, technical analysis (TA) conducted by Bank of America (NYSE: BAC) indicates that the current pain investors are suffering is little more than a temporary setback.
Between March 2023 and March this year, the other major benchmark index – the S&P 500 – offered a positive return rate each month. In fact, last April, it broke its previous bearish trend and surged as much as 22.44% in the 52 weeks.
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Following from this, Bank of America’s Stephen Suttmeier estimated that the S&P 500 is likely to skyrocket another 19% by 2025, reaching 6,000 by August and surging toward 6,150 by November.
Bullish long-term, bearish short-term
Despite the bullish long-term forecast, Suttmeier also warned that the sailing may not be as smooth in the near future. Indeed, the analyst warned that, at the back of the April bloodbath, the benchmark index is likely to continue dropping toward its support zone.
It is possible the S&P 500 will fall as much as 9%, even below the closest support near 5,000, and find itself in the range between 4.600 and 4,800 before reversing the downtrend and beginning its march toward 6,000.
Not everyone as bullish as Bank of America
While Bank of America is far from the only voice expressing bullishness on the stock market and the economy – with ‘The Big Short’ investor Steve Eisman famously predicting there will be no crash unless the FED ruins the party by prematurely lowering interest rates – many have also contributed to the overall fearful atmosphere.
Perhaps the biggest entity to have issued multiple warnings of a looming crisis has been JPMorgan (NYSE: JPM), which previously forecast a 65% chance of a recession coming soon and cautioned that stocks might ‘crack at any moment’ – though the latter warning may have already come to fruition.
Others have been, arguably, more cynical in their predictions. David Brady, a money manager, former FX trader, and Substack author, recently predicted that while the current downturn will cause more damage, it will be halted by the FED prior to the elections, only to develop into a full-blown economic crisis in 2025.
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Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
