- US stock markets have shown weakness over the last few trading sessions. After crashing in March, US stock markets recovered in April. So far, the markets are down slightly for May.
- Goldman Sachs sees the S&P 500 crashing to 2,400. The S&P 500 was near 3,000 earlier this week but didn’t hold that level.
US stock markets versus economic reality
US stock markets have got detached from economic reality. Eventually, markets adjust themselves over the long term. Legendary value investor Warren Buffett isn’t sitting on a $137 billion cash pile without a reason. While we might ignore the subtle warning from Buffett, the disconnect between US stock markets and the economy hasn’t been this stark in recent times
Is a US stock market crash coming?
Several fund managers have been warning about a crash in US stock markets. Paul Tudor Jones and Jeffrey Gundlach expect US stock markets to retest their March lows and form a double bottom. The S&P 500 fell as low as 2,191 on March 23. The Dow Jones Index fell to a low of 18,213 the same day. At one point, the Dow Jones crash erased all of the returns under Trump’s presidency.