US Stock Market Set for a Turbulent Autumn

G. Dautovic Image
ByG. Dautovic
September 20, 2021

Wall Street analysts are warning that the coming weeks and months could be turbulent for investors. Top firms, including Morgan Stanley, Citigroup, Deutsche Bank AG, and Bank of America, published notes pointing to potential risks in the US equity market. 

The news comes after the S&P hit an impressive 54 records this year. Moreover, the gloomy forecasts contradict the so-called "There Is No Alternative" or TINA motto, which shaped the attitude of investors throughout the past year. Many of them have justified their bullish positioning by citing low yields on bonds and other assets. 

But now, some financial institutions appear to be gearing up for a significant plunge. The head of US equity and quantitative strategy at the Bank of America, Savita Subramania, moved his team’s year-end price target for the S&P 500 price to 4250. That’s a 4.7% reduction from the 4458.58 level at which the benchmark index closed at the end of last week. 

Other companies are adamant that they’ll find new investment opportunities. Morgan Stanley strategists said they lowered their rating on US equities to "underweight" and decided to move to stocks in Europe and Japan. 

"We expect an understandable level of eye-rolling as we move overweight cash," the company’s team wrote in the note. "Morgan Stanley strategists forecast cash to outperform U.S. equities, government bonds and credit over the next 12 months.”

The US stock market already exhibited signs of weakness in the most recent trading sessions. The latest numbers show that all three major indexes declined last week. If this trend persists, the S&P 500 could be marking its first loss since January. In addition to negative forecasts about the US equity market, the period of market oscillation is expected for the coming months of the year. 

About author

I have always thought of myself as a writer, but I began my career as a data operator with a large fintech firm. This position proved invaluable for learning how banks and other financial institutions operate. Daily correspondence with banking experts gave me insight into the systems and policies that power the economy. When I got the chance to translate my experience into words, I gladly joined the smart, enthusiastic Fortunly team.

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