Goldman Sachs: Buying S&P 500 After Declines is Profitable: A recent study by Goldman Sachs suggests that buying U.S. stocks
After their recent decline, it could be profitable in most cases.
This analysis is based on four decades of data, showing that markets often recover after significant drops.

Content

Index Performance

Attractive Buying Opportunities

Global Market Stabilization

Recession Risk

CitiGroup Warning

S&P 500 Performance After Declines

According to Goldman Sachs‘ strategy team, led by David Kostin,
the S&P 500 index has achieved an average return of 6% in the three months following a 5% drop from recent highs since 1980.
The analysis shows that returns were positive in 84% of cases after such declines.
The index had dropped by 8.5% from its peak in July.

Attractive Buying Opportunities During Corrections

Kostin noted in a memo that up to 10% of corrections have often provided good buying opportunities,
although the performance after smaller declines may not be as substantial.
However, the team warned that performance after significant declines
could vary depending on economic conditions,
mainly if these corrections occur as part of a pre-recession adjustment.

Global Market Stabilization

Global markets saw relative stability on Tuesday,
as some of the indices were hit hardest by concerns over a U.S. recession,
and tech sector valuations rebounded.
Analysts at JPMorgan indicated that institutional investors took advantage of market dips,
purchasing approximately $14 billion worth of stocks during the trading sessions.

Recession Not Yet Priced In

Goldman Sachs’ team noted that the U.S. market is still not factoring in a potential
recession despite growth-sensitive cyclical stocks lagging behind defensive stocks this month.
On a separate note, Goldman strategists predicted further declines in global equities.
However, they do not expect the market to enter a bear market phase,
defined as a 20% drop from recent highs.

CitiGroup’s Recession Warning

This week, CitiGroup’s strategy team warned that recession scenarios have not been adequately priced into the market.
In a memo by Beata Manthey, Citi’s strategist, metrics such as stock valuations,
yield curves, and investor sentiment suggest a “buy on weakness” approach.
However, Manthey recommended more caution,
advising investors to wait for clear evidence of a full liquidation of current positions before taking further action.

Goldman Sachs: Buying S&P 500 After Declines is Profitable

Goldman Sachs: Buying S&#038;P 500 After Declines is Profitable

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Goldman Sachs: Buying S&P 500 After Declines is Profitable