Bank of AmericaThe "long bull market" in the S & P 500, which began in 2013, still exists after a bear market triggered by a pandemic and is expected to soar to a high of 4900 by the end of 2021, up 20 per cent from its current level, according to a report released on Wednesday. The target price is based on the bank's long-term bull market roadmap, although there may be disruptions in the process.
The so-called "long bull market" (secular bull market) means that the stock market generally maintains an upward trend across multiple business cycles, including cyclical bull and bear markets, as well as periods of economic expansion and contraction. Historically, long-term bull markets have generally lasted for more than 20 years, including stock markets from 1980 to 2000.
But BofA said the stock market needed to cool down before the next rally, referring to an excessive rebound that began at the pandemic low in March 2020.
"the risk is that the pace of rebound from 2020 is too fast," BofA explained. " The bank noted that the S & P 500 has risen at one of the fastest rates since records began in 2020.
BofA said: "the most similar to this rally is the rebound in 2009, 1982 and 1935. These previous rallies suggest that there is a risk of a correction in 2021, which poses a threat to the summer rebound, but will then rise to higher highs in 2021-2022 or even 2024. " Bank of America said.
BofA said the recent sell-off in US stocks was driven in part by higher interest rates and concerns about rising inflation, which represented healthy consolidation and could lay a good foundation for the S & P 500 to rise further.
BofA explained that consolidation made sense given the history of long bull markets, as the seventh year tended to be "halftime". The bank said the long-term bull markets that began in 1950 and 1980 experienced brief breaks in cyclical bear markets in their seventh year.
"Black Monday" took place in 1987, Dow Jones.The industrial average plummeted 23% in a single day. In 1957, the US economy went into recession and the flu spread across the country. In 2020, the long bull market for US stocks, which began in 2013, entered its seventh year, when a global COVID-19 pandemic triggered a 35 per cent bear market sell-off and recession.