Investing.com – As the S&P 500 ebbs and flows around the 5,500 level, BCA warns against chasing stocks above this level as the winds of recession are picking up pace and the cooling 'AI mania' suggest the end for U.S. stock market exceptionalism is on the horizon.was marginally lower on Thursday at 5,500.18, but has jumped about 16% year to date, but further gains will likely be harder to come by.
The slowdown in government spending and business investment, two key components of GDP, has boosted the risk of recession, according to BCA. While the consumer, the backbone of the U.S. economy, remains robust, signs of weakness in the labor market could trigger a pullback in consumer spending. Beyond the macro, stocks are also battling seasonality factors that show September and October as challenging months, exacerbated by political uncertainties surrounding the upcoming U.S. elections and elevated interest rates.
A quick look at history suggests these concerns are credible, as the old adage 'greed is at its peak when the market is at its peak' appears to be setting the stage for an entrance, potentially capping further gains above this key level.Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors.
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