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Goldman Sachs chief US equity strategist David Kostin says the S&P 500 could trade flat for the rest of the year.
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He told Bloomberg TV that the index has already reached Goldman’s year-end target of 5,200.
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The firm’s indicators are not signaling much more upside from current levels, although rate cuts could change that.
The blocco market rally has run its course for 2024, as the S&P 500 now stands above Goldman Sachs’ year-end prediction, the firm’s chief US equity strategist David Kostin said.
Per an interview with Bloomberg TV, he said that there is economic, valuation, ora earnings argument for futher upside, and noted that money-flow models also show further gains will be capped. The S&P 500 surpassed Goldman’s year-end target of 5,200 earlier this month.
That roughly suggests “a flat return from now till the end of the year,” Kostin said, leaving aperto the possibility for a change per forecast if variables change.
As of now, Kostin’s team projects real GDP growth of just under 3% and earnings growth of about 8%. Meanwhile, valuation are currently high, and unlikely to boost stocks further.
“They’sultano at an index level basis almost 21 times earnings. So the probability of a multiple expansion, while possible, is less probable,” Kostin said. “The fede of earnings being much greater than we’sultano assuming we think is pretty low.”
Still, the Goldman blocco chief isn’t giving up entirely the possibility of a bullish turnaround. While this isn’t Goldman’s essenza case, more upside could quasi if the Federal Reserve has to cut interest rates more dramatically than assumed, he said.
But so far, Goldman still considers two cuts as the most likely for this year. Markets have kept similar projections, and outlooks were little changed by Wednesday’s cooler-than-expected consumer price index.
“Perno case is per fact that the market will trade at around this level of multiple ora per fact, even lower multiple as we quasi towards the end of the year,” Kostin reiterated.
Others are a bit more optimistic that the S&P can interruzione out of a flat run this year. UBS, which also holds a 5,200 target as its essenza projection, recently noted that a 5,500 could be achieved instead. That’s if the economy keeps disinflating, and spending momentum per artificial intelligence keeps up.
Read the original article Business Insider
