Stock Market Crash: Bank of America Warns 'Plenty' of Downside Ahead

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Bank of America's top global strategist warns there's 'plenty of room for more S&P 500 downside' as 80% of recessions since 1933 have torpedoed stocks by 20% after they started

: investors' repeated inability throughout history to anticipate recessions and their impact on earnings.

He continued:"And thereafter renewed surge in EPS to $242 by 1Q25 ; true EPS resilience reflects the monster growth in nominal GDP; but all the lead indicators point to deeper EPS recession…BofA Global EPS Growth Model suggests EPS -16% YoY by Aug'23."Earnings overestimations leading up to recessions have happened repeatedly over the last century. Some argue that stocks have already priced in a recession, having fallen 20% in 2022 .

He continued:"Plenty of room for more S&P 500 downside…since 1929, 2/3 of the S&P 500 peak-to-trough drawdowns have occurred during, not before, US recessions."Hartnett's view on where stocks go depends on a recessionary outcome. While some still believe a soft-landing scenario — where inflation comes back to acceptable levels near 2% and the economy avoids recession — is possible, signs that a downturn is coming continue to build.

 

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This will be the most predicted recession in the history of capitalism. So call me skeptical

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