"This is the final rally!" S&P500 surge followed by a warning of a massive crash

"Stock market entering final upward phase" warning... Economist: "S&P 500 will rise further but then likely crash"

▲ US stock market, Wall Street, Nasdaq, Dow Jones Industrial Average, S&P 500, semiconductors, bear market/AI-generated image ©

As the stock market continues its strong performance, macroeconomist Henrik Zeberg warned of a potential large-scale decline in the future, stating that the current market is entering the final phase of a bull run. However, he predicted that the uptrend would not end immediately and that an additional rally could continue.

According to crypto media outlet Finbold on July 6 (local time), Zeberg diagnosed on his social media (SNS) after the release of the June US employment report that the disparity between the real economy and financial markets is widening. He argued that while non-farm payrolls showed a moderate increase, the household survey indicated a loss of more than 500,000 full-time jobs in a month, suggesting a weakening of the labor market's underlying strength.

Zeberg assessed that abundant liquidity and investor optimism are driving stock prices higher even as economic fundamentals slow down, calling this a 'blow-off top' phenomenon often seen in the late stages of a bull market. He explained that in an environment like the present, asset prices are likely to continue their final surge regardless of economic conditions.

He projected that while the S&P 500 index is currently trading around 7,500, there is still room for it to rise to the 6,800-8,200 range before reaching the cycle peak. However, he analyzed that a significant trend reversal is highly likely to occur thereafter.

Zeberg cited slowing private employment, rising consumer delinquency rates, weakening labor force participation, and a decrease in full-time jobs as key hidden risks beneath the market. He stated that although the US economy is already entering a slowdown phase, the stock market is still moving near all-time highs, and while central bank support may prolong the uptrend, it will ultimately be difficult to prevent a decline if economic conditions continue to worsen.

Furthermore, he warned that if investor sentiment reverses in the future, risk assets, including cryptocurrencies, could also experience significant corrections. He also predicted that the risk of recession would expand towards the end of 2026, adding that if financial conditions tighten further and credit crunch deepens, the ultimate recession could be comparable to or even surpass the 2008 global financial crisis.

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