The Goldman Sachs indicator to predict future bear markets is at higher levels, signaling zero returns for the next 12 months and a significant risk of slowing the economy. The indicator takes into account the levels of unemployment, production levels, inflation, and share valuation method based on the Shiller PE ratio. The indicator is 73%, the highest since the 1960s and 1970s.
Even if the indicator signals future difficult times, Goldman's equity strategist Peter Oppenheimer still says that he should not jump to sharp outcomes for a current bear market. At this stage, he expects the economy to slow down, but does not foresee a recession. To declare that the recession is coming, we must first see a sharp increase in inflation and interest rates. But because of the lethargy that has fueled inflation, we have a downward trend in volatility and prolonged expansion
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