US stocks could soon be reaching for highs all over again

By Syed Sajid Aziz in USA
(Pakistan News & Features Services)

The analysts at the Citigroup have reckoned that the US stock markets will deliver among the steepest recoveries in their history over the next year and returning to levels from before March's coronavirus lockdowns more than twice as fast as after the 2008 financial crisis. 

It has been forecast by the bank that the S&P 500 index and Dow Jones Industrial Average index would stand at 3,160 points and 28,400 points respectively in June 2021, up about 7 per cent and 15.5 per cent from current levels. 

The forecast is being considered among the most bullish among US market forecasters, many of whom are forecasting next to no gains for the next 12 months. 

The Citigroup's forecast would see the two indexes recoup 81 per cent and 90 per cent of the losses they suffered from February's record peaks in 465 days. The equivalent recovery after the 2008 crash took the S&P 500 1,107 days and the Dow 1,288 days. 

The optimistic targets reflected expectations for improved economic performance next year and in 2022.

"Embedded in the forecast is an expectation for COVID-19 vaccines and treatments that lift many of the hindrances to 'back to normal' practices that still are in place currently. While some industries could face permanent long-term damage, the Great Pause will reverse itself as time progresses," analyst Tobias Levkovich noted.