After nine consecutive rises, what’s next for the US stock market: 2020 or 2008?
After experiencing nine consecutive gains, the U.S. stock market has recovered all its losses since April 2. Goldman Sachs analysts pointed out that the market may be overly optimistic, citing the cases of 2020 and 2008 as references. The analysts listed four logics: high tariff levels, expensive valuations, excessive inflation, and the lack of stimulus measures similar to those in 2020
Amidst a chorus of skepticism, the US stock market completed a "nine-day rally," recovering all losses since the "reciprocal tariffs" on April 2.
Regarding the rapid recovery of the US stock market from uncertainty, Goldman Sachs analysts quoted a remark about a similar market trend in April 2020:
Faced with problems they know will definitely be resolved, the market cannot wait for solutions to emerge before taking action.
Is the US stock market being overly optimistic? There are two cases for reference.
2020 proved the market was right, while 2008 proved the market was too optimistic too early.
Goldman Sachs' Chris Hussey pointed out four logics:
- Tariff levels are at their highest in 80 years;
- US stock valuations remain expensive;
- Current inflation levels are already too high;
- In 2020, the US stock market "forgot" the pandemic in just two weeks, but behind that was unprecedented stimulus in the US and globally, which may not be available this time.
