AI boom could significantly boost profits and productivity to prevent negative impact on economy from budget deficits
Federal Reserve expected to cut interest rates early in 2025
Neither a bear market nor a stock-market bubble expected by Societe Generale
Societe Generale predicts S&P 500 to reach 6,666 due to AI-boosted productivity
Volatility surrounding elections identified as potential downside risk for S&P 500
The AI boom is creating a buzz in the financial world, with predictions that it could send the S&P 500 soaring to an unprecedented 6,666. According to Societe Generale, investors are expected to continue investing in U.S. stocks in anticipation of interest rate cuts by the Federal Reserve early in 2025. The French financial services company's strategists believe that the market will maintain its 'buy-the-dip' behavior as the next rate-cutting cycle approaches, despite a 15% surge in the index this year. However, they also warn of a potential downside risk in the third quarter due to volatility surrounding the elections. Societe Generale's analysis suggests that while the S&P 500 is at a 'critical juncture', neither a bear market nor a stock-market bubble is expected by the firm. Instead, they identify an upside risk from the AI boom, which could mirror the dot-com bubble and significantly boost profits and productivity to prevent budget deficits from negatively impacting the economy. Vanguard Group's head of global economic research, Kevin Khang, believes that productivity growth similar to that spurred by personal computers and the internet won't be enough for an AI boom. The outlook for the US economy and S&P 500 depends on what Khang calls 'the horserace between AI-boosted productivity and worsening structural deficit dynamics'. In other words, it's a delicate balance that could make or break the market. As always, it pays to stay informed and keep an eye on developments in this rapidly evolving sector.
The AI boom is required to deliver significant corporate profits and productivity growth to prevent budget deficits from negatively impacting the economy.
Vanguard Group’s head of global economic research, Kevin Khang, believes that productivity growth similar to that spurred by personal computers and the internet won’t be enough for an AI boom.
The outlook for the US economy and S&P 500 depends on the ‘horserace between AI-boosted productivity and worsening structural deficit dynamics’.
]The article is the only one that mentions the requirement for AI to deliver significant corporate profits and productivity growth to prevent budget deficits from negatively impacting the economy.[
Vanguard Group's head of global economic research, Kevin Khang, is mentioned only in this article.
Accuracy
The AI boom is required to deliver significant corporate profits and productivity growth to prevent budget deficits from negatively impacting the economy.
The S&P 500 has seen a robust surge of 15% since the beginning of the year and Societe Generale strategists expect it to maintain its ‘buy-the-dip’ behavior.
Societe Generale projects investors will continue investing in US stocks, anticipating potential interest rate cuts from the Federal Reserve in early 2025.
The current boom in artificial intelligence could potentially propel the S&P 500 to as high as 6,666.
The AI boom is required to deliver significant corporate profits and productivity growth to prevent budget deficits from negatively impacting the economy.
The outlook for the US economy and S&P 500 depends on the 'horserace between AI-boosted productivity and worsening structural deficit dynamics'.
Societe Generale projects investors will continue investing in US stocks, anticipating potential interest rate cuts from the Federal Reserve in early 2025.
