The stock market has peaked and will trade flat for the rest of 2024, Goldman equity chief says

The stock market has peaked and will trade flat for the rest of 2024, Goldman equity chief says

A inventory dealer at work on the New York Inventory Trade on February 24, 2020.Johannes Eiselle/Getty Photos

  • Goldman Sachs chief US fairness strategist David Kostin says the S&P 500 may commerce flat for the remainder of the yr.

  • He informed Bloomberg TV that the index has already reached Goldman’s year-end goal of 5,200.

  • The agency’s indicators will not be signaling rather more upside from present ranges, though fee cuts may change that.

The inventory market rally has run its course for 2024, because the S&P 500 now stands above Goldman Sachs’ year-end prediction, the agency’s chief US fairness strategist David Kostin stated.

In an interview with Bloomberg TV, he stated that there isn’t any financial, valuation, or earnings argument for futher upside, and famous that money-flow fashions additionally present additional features shall be capped. The S&P 500 surpassed Goldman’s year-end goal of 5,200 earlier this month.

That roughly suggests “a flat return from now until the tip of the yr,” Kostin stated, leaving open the chance for a change in forecast if variables change.

As of now, Kostin’s group initiatives actual GDP development of just below 3% and earnings development of about 8%. In the meantime, valuation are presently excessive, and unlikely to spice up shares additional.

“They’re at an index stage foundation nearly 21 instances earnings. So the likelihood of a a number of enlargement, whereas doable, is much less possible,” Kostin stated. “The thought of earnings being a lot larger than we’re assuming we expect is fairly low.”

Nonetheless, the Goldman inventory chief is not giving up solely on the opportunity of a bullish turnaround. Whereas this is not Goldman’s base case, extra upside may come if the Federal Reserve has to chop rates of interest extra dramatically than assumed, he stated.

However to this point, Goldman nonetheless considers two cuts because the most definitely state of affairs for this yr. Markets have stored related projections, and outlooks had been little modified by Wednesday’s cooler-than-expected client worth index.

“Base case is in truth that the market will commerce at round this stage of a number of or in truth, even decrease a number of as we come in the direction of the tip of the yr,” Kostin reiterated.

Others are a bit extra optimistic that the S&P can escape of a flat run this yr. UBS, which additionally holds a 5,200 goal as its base projection, just lately famous {that a} 5,500 could be achieved as a substitute. That is if the economic system retains disinflating, and spending momentum in synthetic intelligence retains up.

Learn the unique article on Business Insider

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