The U.S. economy is slowing, but there is no talk of a significant collapse or worse. The labor market also continues to hold up despite all the headwinds. Finally, inflation, albeit with some fluctuations, is somewhat under control.

Against the backdrop of such encouraging data, Janet Yellen, the head of the Treasury, along with some members of the FOMC, continue to assert that there will be no recession. So, should we expect a bull rally between now and the end of the year?

Opinions among analysts differ.

While financial models from Fundstrat Global Advisors suggest that the S&P 500 index could rise to 4,825 points in the coming months, the bigwigs at Morgan Stanley are bracing for a correction to 3,900 by the end of the fourth quarter.

Such a significant divergence in forecasts results from a high level of uncertainty. It is still unclear whether the Fed will raise interest rates again and whether we will experience another Arab Spring in a month's time.

As for who will ultimately be right, even if we assume that the conflict in Israel will not engulf the entire region, energy markets will stabilize, and monetary policy tightening will cease, from a fundamental standpoint, there is little reason for optimism.

Starting with households, while Americans still appear to have about $1 trillion in savings for a black day, as the latest data from the Bureau of Economic Analysis suggests, some belt-tightening on the spending side is already apparent.

For example, while retail sales grew 0.6% (M/M) in August, they are expected to slow to 0.2% in September. With the start of student loan repayments, the situation is expected to worsen, leaving as many as 40 million Americans on the hook for a new monthly bill.

In short, there is little hope of a tsunami of dumb money inflows into the markets. Therefore, without a new FOMO (fear of missing out), expecting a sudden influx of irrational money into the stock market is not advisable.

Speaking of business, due to the Federal Reserve's fight against inflation, 2023 may surpass 2020 as the worst year in business bankruptcies in the last decade. According to S&P data, 516 bankruptcies were recorded in the third quarter.

By comparison, during the same period in 2020, there were 518 bankruptcies. However, investors prefer to look at something other than these alarming data, focusing only on what the Fed says.

As for the government, it also suffers from high-interest rates. Net interest payments in the United States will rise from 2.5% to 3.6% of GDP in 2033 to 6.7% in 2053. This means that some investment programs could face cuts in the future.

Another risk investors need to keep in mind is politics. Even if the Democrats and Republicans succeed in electing a new Speaker of the House on the first try, the budget for 2024 still needs to be passed.

With the upcoming presidential elections, each side will try to gain an advantage, and the inability to reach an agreement could lead to a government shutdown. This will not lead to a collapse of the system, but it could further slow down the countries' economic growth.