The stock market is currently in one of the worst states in recent memory, as various stock options continue to plummet with no sign of rock bottom anywhere. And as interest rates continue to peak, many analysts are having a hard time seeing a silver lining for the stock market anytime soon.
In fact, Jamie Dimson has predicted a 20% sell-off, with stocks from various industries reaching their lowest points in months.
However, this is not a prediction that all analysts share. The Global Stock Strategist from Goldman disagrees with Jamie Dimon’s very aggressive prediction, and he has all the evidence he needs to prove his theory.
A Continued Downtrend
Although many have disagreed with the idea that stocks could plunge as much as 20%, the truth is that the stock market still has a long way to go before investors can expect stocks to fall. So even though they will not fall as much as the JP Morgan CEO has predicted, investors should still expect stock prices to fall.
The chief global stock strategist at Goldman Sachs believes that unless the interest rates peak, investors should prepare for stocks to fall or stagnate. And since it can be hard to predict when either the interest rates or inflation rate will peak, it can be hard to say.
Peter Oppenheimer Remains Optimistic
Although many analysts have a very grim outlook on the entire stock market, Oppenheimer disagrees that it is actually that bad. Instead, he believes that the private sector has been pulling its weight, which can help a lot of the stock options stabilize considerably.
According to Oppenheimer’s analysis, with each drastic fall in the stock market, three things have been consistent. There was a rise in interest rates, the asset market completely deflated, and the private sector balance sheets were very poor.
When all three of these factors align, the market often loses close to 50% or 60%, which many investors can see with each financial crash.
However, unlike those other instances of the market falling, the private sector is still showing very positive and strong balances. Therefore, it is safe to say that a 20% fall-off can be very unlikely since the private sector is still managing to hold on despite the different market conditions.
Financial Market Vulnerability Still a Major Concern
While Oppenheimer is still looking very optimistic about the current stock market, the truth is that most of the individuals who are struggling with the current stock market are creating a financial market vulnerability that will negatively affect various stocks.
As a result, various institutions throughout the US that focus on various assets will not be worth trusting to the average investor.