Bite the bullet.

angela weiss/Agence France-Presse/Getty Images.

This week could be good for U.S. investors as post-Labor Day trading points to a tough ride for tech stocks, with some fearing last week’s mini-meltdown is the start of something bigger.

It doesn’t help that from late last week came the news that Tesla

It won’t be included in the S&P 500.
, -0.81%

Next month. The electric car maker’s shares fell 12 percent pre-market.

Rallying the troops is our call of the day from Peter Oppenheimer, chief global equity strategist at Goldman Sachs, who has 10 reasons why the bull market has further to go, but with a caveat.

  1. We are in the classic “hopeful” phase of the new investment cycle, which comes after a deep recession. The first phase is usually the strongest, which explains this year’s gains.
  2. “As vaccines become more likely, the economic recovery looks more durable.”
  3. Goldman Sachs’ own economists have recently raised their economic forecasts, and the rest of Wall Street should follow suit.
  4. The bank’s bear market indicator was upgraded in 2019, noting that even at very high valuations, the risk of a market rout is low. |.
  5. Central banks and governments will continue to provide support to markets and the economy to reduce risk for investors.
  6. The equity risk premium — the expected return on equities versus bonds — has room to decline. The decline in dividend yields has not kept pace with the “relentless” decline in bond yields since the financial crisis.
  7. Negative real interest rates were supportive of equities. The return to a zero nominal interest rate policy, coupled with the extension of forward guidance by banks, has created a “greater negative real interest rate environment”. This should support riskier assets such as equities during the recovery.
  8. While inflation is not expected to rise sharply in the short to medium term, “equity markets could provide a more effective hedge against unexpected price increases”.
  9. Equity looks cheap compared to corporate debt, especially when it comes to companies with strong balance sheets.
  10. The digital revolution and how it will change the economy and the stock market is yet to be seen. Oppenheimer said, “Yes, if the economy slows, the entire market, including tech stocks, could correct.

    However, given that many of these companies generate large amounts of cash and have strong balance sheets, they are also considered relatively defensive and are likely to continue to outperform even in a market correction,” the strategist said.

Alas, this bullish thesis is risky. Oppenheimer says that if the economy, which the market is pricing in, rebounds quickly and begins to falter, equities could fall.” In that case, we see room for a correction of perhaps as much as 10% as investors get back into the growth path over the next few months.”


Nasdaq 100 Index Futures
, -2.79%

is taking a hit on the Standard & Poor’s 500 Index.
, -1.13%

and Dow (name)

European stocks stumble
, -1.50 per cent

It’s also being dragged south for oil.
, -6.81%

A big drop in the dollar



General Motors (car company)
General Motors
, +1.76%

The company’s shares are climbing after the automaker said it will be the exclusive supplier of fuel cells to zero-emissions truck maker Nikola.

for Class 7/8 models. Nikola shares surged.

While Tesla gets a whiff of the S&P 500, pharmaceutical group CatalentCTLT

marketplace EtsyETSY
58%, and

automated test equipment group TeradyneTER,
06% are all


, +1.35%

The stock’s fall follows reports that production issues have triggered a review by aviation safety regulators of quality control failures at Dreamliner.

Tech giant Alphabet’s Google GOOGL unit has abandoned plans to rent office space for 2,000 workers in Dublin, Ireland.

Results from athleisure apparel maker Lululemon.

and messaging platform Slack


Being post-earnings.

Download Media Giant Disney’s
, -0.93%

Streaming apps jumped 68 percent over the weekend, likely driven by the release of “Mulan.

The U.S. may ban the use of cotton from China’s Xinjiang region amid allegations of forced labor, while U.S. President Donald Trump threatens to “decouple” the U.S. economy from that of China.

PG&E plans power outage for California as wildfires continue to rage over Labor Day weekend.

The final IHS Markit Manufacturing PMI for August is ahead, along with the Institute for Supply Management’s index for the same month, construction spending and auto sales.


While Spain and other European countries saw a second wave of COVID-19 cases, the U.S. reported fewer than 30,000 cases for the first time in months.Thomas Lee, founder of Fundstrat Global Advisors, said the U.S. positivity rate fell to 4.6% late last week, a three-month low.

FundStrat Global Advisors

“Getting that number below 5%, as well as expanding the test, is considered a fairly controlled level of COVID-19 infection,” he told clients in a note.


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