Lucas Jackson/Reuters
- Major US indexes recently rebounded into bull-market territory. But precedent suggests stocks will fall further as the US slides into a lengthy recession, Societe Generale said in a Thursday note.
- The stock market is in the middle of a brief bear-market bounce mirroring gains made in October 2008 before the financial crisis pulled equities down another 25%, the strategist and longtime bear Albert Edwards said.
- Downward pressure from low inflation and a near-term recession stand to make the virus-induced profit slump deeper than past declines, he added.
- Many investors are poised to reenter the market "only to be crushed as history suggests is normal," Edwards wrote.
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Equities may have technically returned to bull-market territory, but Societe Generale sees the uptick as a precursor of deeper lows.
The benchmark S&P 500 is fresh off its biggest weekly gain since 1974 following a short week. The index got a boost on Thursday as new Federal Reserve aid lifted investors' spirits. The recent gains followed nearly two months of sharp selling amid fears of a coronavirus-fueled recession.
See the rest of the story at Business Insider
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