According to Guggenheim Chief Investment Officer Scott Minerd, due to a combination of negative factors such as seasonality and stock revaluation, investors in the US stock market will not do well in the short term, as the bear market continues, and by mid-October the S&P 500 may fall by 20%, writes Business Insider.

According to him, the recession that has begun in the United States can already be judged by high inflation and low productivity. However, the investor’s view that the economy is already in recession is ignored by most investors.

“People seem to be ignoring the macroeconomic backdrop, the backdrop of monetary policy, which essentially indicates that the bear market is continuing. It is quite possible that we are already in a recession, I do not see a sharp increase in income, on the contrary, I see some downward pressure on income in the energy and other sectors where we have had price declines,” Minerd said.

Oil prices have fallen in recent months, with WTI down 31% from its June peak.

A sharp correction in stock prices will happen soon enough, according to Minerd, given the seasonality and historically strong deviation from the price-to-earnings ratio. A stronger labor market and healthy consumer demand are preventing some investors from saying that the economy is currently in recession, instead supporting the hope that a “soft economic landing” is still possible.

But speaking of the same labor market, Meinerd did not fail to point out that labor productivity is woefully low:

“More people are returning to work, but in fact there is a decrease in productivity per worker. The employment rate is lagging behind. We tend to see unemployment rise after the start of a recession. A lot of things are only nominally positive, and inflation is so high that in real terms it’s actually a negative number, and that’s how we measure GDP.”

But in general, Minerd’s forecast is quite positive: soon the S&P 500 may trade in the range of 3000-3400 points, and that’s when the stock will look the most attractive, which means it’s worth buying. That being said, the positive seasonal fluctuations that will come after October and the support of the Fed against the backdrop of falling stock prices will bode well for the market recovery at the end of the year.