Goldman says there is plenty of space to walk in the bull market, but a 10% selloff cannot be ruled out.

Grind and hang your teeth.

Angela Weiss / Agence France-Presse / Getty Images

It may be a good thing that this week will be short for American investors, as the trading points after Labor Day for a rough ride for technology stocks are concerned by some last week’s mini-meltdown, which is something big. .
Tesla TSLA news that late last week did not help,
+ 2.78%
The S&P 500 will not be added to SPX,
Next month. Electric carmaker shares have dropped 12%.

Soldiers rally is ours Phone of the day Peter Oppenheimer, chief global equity strategist at Goldman Sachs, has 10 reasons why the bull market has moved forward, but at the same time a warning.

  1. We are in the classic “expectation” phase of a new investment cycle that has come on the heels of a deep recession. That first phase is usually the strongest and that explains the profit for this year.
  2. “The economic recovery looks more sustainable because vaccines are more likely to occur.”
  3. Goldman’s own economists have recently revised economic forecasts and the rest of Wall Street should follow.
  4. The bank’s bear market indicator, which was elevated in 2019, points to a lower risk to market value, even if valuations are higher.
  5. Central banks and governments will continue to support markets and economies, reducing risk for investors.
  6. The equity risk premium – the expected return on shares higher than the bond – has the potential to fall. Since the financial crisis, there has been no decline in dividend yields, with a “relentless” decline in bond yields.
  7. Negative real interest rates are helpful for stocks. Re-introducing the zero nominal interest rate policy creates an “environment of more negative real interest rates” with expanded guidance from banks. And that should support risky assets such as stocks during a recovery.
  8. While inflation is not expected to rise by any large amount for the medium term, “equity markets may offer a much more effective hedge with unexpected increases.”
  9. Compared to corporate debt, equity looks cheaper, especially when it comes to companies with strong balance sheets.
  10. The digital revolution and how it will change the economy and stock markets go further. Oppenheimer says that if the economy slows down, the entire market, including tech stocks, may be correct. Says the strategist, “But, given that many of these companies generate a lot of cash and have a strong balance sheet, they are also considered relatively defensive and may continue to improve the market.”

Alas, there are risks to this rapid thesis. Oppenheimer says that if the price rises in a rapidly rebound economy market, the stock could fall. “In this case, we probably see room for improvement of up to 10% as investors re-enter the path of growth in the next few months.”

Nasdaq-100 Futures NQ00,
The S&P 500 is being marked with ES00,
And Dow YM00,
Very European Stock SXXP,
Also dragged south, oil with CL.1,
The dollar is falling sharply and DXY,
+ 0.58%
The buzz
Gm gm,
+ 1.76%
Shares are rising for the auto maker’s zero fuel-emission truck manufacturer Nikola NKLA, saying it will be the exclusive supplier of fuel cells.
For Class 7/8 models. Nicola shares are climbing.
While Tesla has acquired the S&P 500 snub, pharmaceutical group Catalant CTLT.
Online marketplace Etsy ETSY,
And automated testing equipment group Teradyne TER,
Are in
Boeing BA,
+ 1.35%
Shares are down following a report that production problems have triggered a review of the lack of quality-control of Dreamliner aircraft by air-safety regulators.
Tech giant Alphabet’s Google GOOGL unit plans to rent office space for 2,000 employees in Dublin, Ireland.
Results from sports leisure wear manufacturer Lululemon LULU,
And messaging platforms are dull work,
Coming after closing.
Download of media giant disney dis
The streaming app jumped 68% over the weekend, possibly inspired by the release of “Mulan”.
The US could force China to ban the use of cotton from the Xinjiang region, while President Donald Trump threatened to “disintegrate” the US economy from China.
PG&E plans for California as a power outage as wildfires continued on the weekend of Labor Day.
The final IHS Market Manufacturing Purchasing Managers Index for August is ahead, along with the Supply Management Index for the same month, Institute, Construction Expenses and Automobile Sales.
While Spain and other European countries are seeing a second wave of COVID-19 cases, the US reported under 30,000 cases for the first time in months. Fundstrat Global Advisors founder Thomas Lee says the US positivity rate dropped to 4.6% over the weekend, a three-month low.

FundStrat Global Consultant

In a note told customers, “With extended testing, the figure is hovering below 5%, seen as a level where COVID-19 infection is heavily contained.”
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