We remain in a bull market, selloff is a buyable correction: Evercore ISI

Despite recent market volatility, Evercore ISI analysts assert that we are still in a bull market and view the current selloff as a "buyable correction."

Reflecting on historical market turbulence, they remind investors that today's challenges are far less severe compared to past crises, notably the period surrounding President Richard Nixon's resignation in 1974.

At that time, the U.S. was embroiled in one of the most brutal bear markets in history, driven by political, social, and economic turmoil.

The Evercore analysts draw a parallel to the present, noting that while recent events, such as the Bank of Japan's rate hike, have stirred market anxiety, these issues are manageable compared to the disarray of the past.

"The challenge to markets today pales in comparison to the political, social, and economic disarray half a century ago," Evercore ISI points out, emphasizing that current conditions should not be cause for panic.

Moreover, the firm highlights that the VIX, a key measure of market volatility, reached a peak of 65 on Monday, which they believe reinforces the view that the selloff is merely a correction within a broader bull market.

"We are reminded that Earnings drive stocks in the long term," they state, underlining the importance of corporate earnings in determining market direction.

As the second-quarter earnings season concludes, Evercore ISI notes that earnings growth of over 11% and stable estimates for 2024 and 2025 are positive indicators.

This, coupled with the upcoming U.S. election, is said to suggest that while the road ahead may be bumpy, the overall trajectory remains upward.