That question prompted by Bank of America Merrill Lynch researchers in a note this morning.
“The S&P 500 index peaked at 2019 roughly 8 minutes after the Sept 19th launch of the Alibaba IPO. Since then US and global stocks have fallen 10% and cyclical sectors such as energy, materials and industrials have been decimated.”
This is the long-term view: Alibaba’s flotation came right at 2014’s peak: the S&P 500 was up about 9.8% from the start of the year on 19 September, and it’s now just 2.4% up from January.
BofA’s analysts say they predicted this when the dollar started to pick up this summer, suggesting a fall/autumn correction. But they also add that they’d expected a shock to rates, rather than a shock to growth, particularly from Europe.
Things still aren’t too bad, according to the economists, with the US consumer currently keeping markets out of full-blown panic mode. Here are the four main pro-consumer factors that BofA suggests will keep the US away from another downturn: