The Bank of America ’s analysts suggests that the S&P 500 is about to reach a new high record, but there are still some risks roaming around such as the contested Presidential elections held on 3rd November this year or the delay in the next round of coronavirus stimulus. This may lead to threatening the stock market rebound and of a correction in the market.
These risks are not enough the Investors are thinking about
Problems predicted by the Bank of America are:
- The Senate adjourns till September as the US lawmakers are stick in a stalemate. This will result in a disagreement on the next corona-virus stimulus bill and will take some weeks to reach on a final agreement. The Bank of America has also informed that the progress is lagging behind, suggesting that Congress may have exhausted its resolve. Only a correction in the market will be able to wake up the policymakers from their dogmatic slumber.
- A House-Selected President is the second risk to the market, as analysts say. Problems like mail-in ballots or recounts in contested states, tensions about expanding voting procedures are adding uncertainty to the investors. If these problems occur then the state officials could deny certifying their electors. This means that the Constitution would require the House to elect a president, but only with one vote for each delegation and the Republicans would likely hold the majority.
- According to the Bank of America, a vaccine surprise is the third factor that could have an impact on the markets. Six candidates are already in large scale phase three trails, with some starting mass productions.
The firm says that the financial assets are not yet priced for a “returns to normal “ in 2021.