US Stock Market Will Face a 30% Correction: Forecast

Vinod Dsouza
us multibagger stock nyse market
Source: Reuters / Andrew Kelly

Financial analyst and seasoned forecaster of the US stock market Gary Shilling warns a 30% dip is on the cards. Shilling raised red flags that a potential recession could wipe away a portion of the stock market’s wealth in the US. According to his prediction, the downward spiral will be triggered by the weakening job market indicators and investors’ overconfidence.

Also Read: Trump Seeks $1 Billion From Oil Firms To Scrap Biden Climate Policies

He pointed out a surge of investments in the stock market that made Dow Jones and Nasdaq touch new highs. The Dow Jones Industrial Average touched a high of 39,889, while the Nasdaq Composite reached a high of 16,538. Therefore, the US stock market is brimming with investments as several equities delivered massive returns.

Also Read: BRICS: Top Economist Says U.S. Dollar is ‘Getting Worse’

A 30% Crash in the US Stock Market on the Horizon, Forecasts Analyst

US stock market wall street
Source: REUTERS / Brendan McDermid

Shilling noted that historically such surges have often met with market correction of double digits in the US stock market. He stressed that over-investments are a cause of worry as the majority of assets could experience a bloodbath. “You look at all the kind of speculation that we’ve had out there. It’s indicative of a lot of overconfidence, and that usually gets corrected and corrected violently,” he said to Business Insider.

Also Read: U.S. Millionaire Says Gold Prices ‘Will Go Very High’

The analyst was one among the forecasters in the mid-2000s who accurately predicted the subprime mortgage bubble. He now forecasts a 30% correction in the US stock market in 2024. He added that the key indicators of economic weakness include high interest rates and a weakening job market. According to him, the development is a cocktail that’s brewing for disaster in the US stock market.

In addition, he highlighted that consumer savings after the COVID-19 pandemic has depleted leading to lesser consumerism. The development would impact businesses and the chances of further layoffs in the industry increase. In conclusion, all these patterns lead to a US stock market crash of 30%. he said.