ALBAWABA - Bank of America believes that the US stock market may reach record levels before the end of the current year.
The US bank stated in a memorandum that while September is typically the worst month of the year for stock market returns, this is not the most likely scenario when stocks are up by a range of 10% to 20% at the beginning of the month.
Bank of America's predictions are based on a scenario known as "Goldilocks," which indicates a period when the economy neither expands nor contracts significantly and is characterized by positive earnings yields and strong stock market performance.
Since the beginning of this year, the S&P 500 index has risen by approximately 18%.
According to the memorandum, the year 2023 offers an upward opportunity for September and the rest of the current year.
In line with Bank of America's scenario, the expected levels for the S&P 500 index by the end of the current year range between 4850 points and 4875 points, marking an all-time high.
Seasonal data also suggests that the bearish movement in the stock market during August was healthy and should be welcomed by investors.
The memorandum attributed this to the fact that without the bearish movement, the S&P 500 index would have started this month up by more than 20% since the beginning of 2023.
