Wells Fargo Bank issued a report on Monday warning that the US stock market, which has been thriving this year, may be approaching a "hangover period". The bullish trend in the US stock market after the US presidential election seems to be out of sync with economic data, and this discrepancy will eventually need to be resolved, which may mean that the stock market will experience a correction. (Background: Is the US economy in a serious recession? Analyst: Bankruptcies are soaring like during the financial tsunami) This year is a bumper year for the US stock market. The S&P 500 index has risen by more than 27% so far this year. However, according to Business Insider, Wells Fargo Bank warns that the post-election frenzy may cause the stock market to enter a "hangover period", with the S&P 500 index falling by as much as 7%. Economic data is out of sync with the stock market Wells Fargo Bank released a report on Monday pointing out that the gap between the US stock market and the economy is widening. Despite the mediocre US economic data, the US stock market index has continued to rise after the presidential election. Bloomberg's US Economic Surprise Index, which tracks the difference between the actual performance of economic data and market expectations, is currently only slightly above zero, indicating that despite the optimistic sentiment driving the market higher, there have been few surprising economic data in the market recently. Sameer Samana, senior global market strategist at Wells Fargo Bank, said: This worries us because the bullish sentiment in the stock market has remained high since the election. In other words, investors seem to only look at the bright prospects in the future, completely ignoring the disappointing economic data at present. We believe that this discrepancy will eventually need to be resolved. Samer Samana pointed out that from a technical indicator perspective, the stock market is approaching the "overbought zone", and investors need to be "cautious of the hangover period". The S&P 500 index closed at 6037 points on Thursday, and in the short term, the index is expected to touch the upper limit of 6,090 points in the recent high. If the index shows a downward trend, it may find support at around 5,515 points, which means that it may fall back by 7% from the current level. However, despite the possible fluctuations in the short term, Wells Fargo Bank remains optimistic about the stock market prospects for 2025. The bank's previous report predicted that the S&P 500 index could reach 6,500 to 6,700 points at the end of 2025, and the economy and corporate profits will provide strong support. Other institutions warning About risk, not just Wells Fargo Bank, BCA Research believes that because stock prices are at historical highs and the potential weakness of the US economy, the stock market may enter a bear market early next year. Societe Generale Bank also stated that from the signs of weakness in the labor market, the US economy still faces the downside risk of "compressed profits". Investors need to be aware that if the US stock market corrects, the cryptocurrency market may also face downward risks. As part of risky assets, the cryptocurrency market often has a certain correlation with the stock market. The increase in economic uncertainty may further weaken the market's risk appetite.
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Bank of America warns: the disconnect between the stock market and the real economy is widening, beware of short-term major düşüş
Wells Fargo Bank issued a report on Monday warning that the US stock market, which has been thriving this year, may be approaching a "hangover period". The bullish trend in the US stock market after the US presidential election seems to be out of sync with economic data, and this discrepancy will eventually need to be resolved, which may mean that the stock market will experience a correction. (Background: Is the US economy in a serious recession? Analyst: Bankruptcies are soaring like during the financial tsunami) This year is a bumper year for the US stock market. The S&P 500 index has risen by more than 27% so far this year. However, according to Business Insider, Wells Fargo Bank warns that the post-election frenzy may cause the stock market to enter a "hangover period", with the S&P 500 index falling by as much as 7%. Economic data is out of sync with the stock market Wells Fargo Bank released a report on Monday pointing out that the gap between the US stock market and the economy is widening. Despite the mediocre US economic data, the US stock market index has continued to rise after the presidential election. Bloomberg's US Economic Surprise Index, which tracks the difference between the actual performance of economic data and market expectations, is currently only slightly above zero, indicating that despite the optimistic sentiment driving the market higher, there have been few surprising economic data in the market recently. Sameer Samana, senior global market strategist at Wells Fargo Bank, said: This worries us because the bullish sentiment in the stock market has remained high since the election. In other words, investors seem to only look at the bright prospects in the future, completely ignoring the disappointing economic data at present. We believe that this discrepancy will eventually need to be resolved. Samer Samana pointed out that from a technical indicator perspective, the stock market is approaching the "overbought zone", and investors need to be "cautious of the hangover period". The S&P 500 index closed at 6037 points on Thursday, and in the short term, the index is expected to touch the upper limit of 6,090 points in the recent high. If the index shows a downward trend, it may find support at around 5,515 points, which means that it may fall back by 7% from the current level. However, despite the possible fluctuations in the short term, Wells Fargo Bank remains optimistic about the stock market prospects for 2025. The bank's previous report predicted that the S&P 500 index could reach 6,500 to 6,700 points at the end of 2025, and the economy and corporate profits will provide strong support. Other institutions warning About risk, not just Wells Fargo Bank, BCA Research believes that because stock prices are at historical highs and the potential weakness of the US economy, the stock market may enter a bear market early next year. Societe Generale Bank also stated that from the signs of weakness in the labor market, the US economy still faces the downside risk of "compressed profits". Investors need to be aware that if the US stock market corrects, the cryptocurrency market may also face downward risks. As part of risky assets, the cryptocurrency market often has a certain correlation with the stock market. The increase in economic uncertainty may further weaken the market's risk appetite.