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Peter Davis

An writer at FOMOdrive

  • Oct 24, 2023
  • 2 min read

Geopolitics will allow you to buy stocks profitably

For the past three months, the S&P 500 index has been on a downward trend.

Until the end of the year, Morgan Stanley had doubts about the potential for the stock market to grow.

The Wharton professor declared that risks in geopolitics present an opportunity to invest in stocks.

For the third consecutive month, the S&P 500 index has been declining due to worries that the Federal Reserve has not finished its series of interest rate increases - the index has dropped approximately 8% since the end of July.

The FxPro analyst team stated that major US equity indices ended last week on a poor note, which is a significant indication of investor weakness that could lead to a more intense sell-off in the upcoming week.

Global shares' index dropped below local lows in October and May, and hit its lowest level since March. This was the lowest point for global stocks since the peak of the US regional banks' crisis, according to FxPro.

Morgan Stanley believes that the probability of an increase in the US stock market by the end of the year is diminishing, due to the various risks that investors are facing - from over-optimistic predictions of corporate earnings to the US's stricter monetary policy.

RBC predicts that the S&P 500 will end the year at 3,900 points, representing a decrease of almost 8% from its current levels.

JPMorgan has a pessimistic outlook for the US stock market in the coming months, citing the ongoing conflict in the Middle East as a major factor. As a result, the bank suggests reducing the amount of stocks in one's portfolio and increasing investments in gold.

Professor Jeremy Siegel, from the Wharton School of Business at the University of Pennsylvania, believes that the current geopolitical tensions present an opportunity to purchase stocks at reduced prices.

He believes that stocks are more profitable than bonds, due to the potential for strong economic growth, which could be driven by the advancement of artificial intelligence, among other factors.

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