Goldman Rolls Back Its Pessimistic Outlook for American Stocks

- Advertisement -
- Advertisement -
- Advertisement -
- Advertisement -

Goldman Sachs Group Inc. has effectively bowed to pressure from the continuing rally in U.S. stocks and abandoned its call for another steep sell-off.

Strategists led by David Kostin have rolled back their prediction that the S&P 500 would slump to the 2,400 level — over 20% below Friday’s 3,044 close — and now see downside risks capped at 2,750. The U.S. equity benchmark could even rally further to 3,200, they wrote in a May 29 note.

“The powerful rebound means our previous three-month target of 2,400 is unlikely to be realized,” the strategists wrote. “Monetary and fiscal policy support limit likely downside to roughly 10%. Investor positioning has oscillated between neutral and low and is a possible 5% upside catalyst.”

The shift came just after JPMorgan Chase & Co.’s strategists shifted in the other direction — reining in their bullish outlook. JPMorgan’s Marko Kolanovic warned about rising U.S.-China tensions in a note May 28.

JPMorgan’s Kolanovic Dials Back Bullish Stance on Equities

Goldman’s strategists maintained their year-end target of 3,000 for the benchmark U.S. stock gauge.

Goldman continues to argue that short-term returns are skewed to the downside — “or neutral at best” — thanks to the risk of an economic, earnings, trade or political “hiccup” to the normalization trend. A broader participation in the rally would be needed for the S&P 500 to move meaningfully higher.

The S&P 500 has climbed 36% from its March 23 low, helped by massive fiscal and monetary support, mega-cap outperformance and optimism about the economy restarting, according to Goldman. Last month it argued fear of missing out was a key driver of the rebound in stocks.

This article was originally posted on finance.yahoo.com/news/.

Home of Science
Follow me

- Advertisement -

Discover

Sponsor

Latest

Tesla Sets Sales Record In China Despite Coronavirus Crisis

Tesla has just had its best month in China, selling a record high number of electric vehicles in March despite a 41-percent plunge in...

An Updated Time Travel Thriller With A Superb Performance From Khalid Khan

The most awesome and motivating actress to hit the big screen is British starlet Khalid. He is also a Pakistani Muslim from the wealthy...

Mesothelioma

A lot of people may not be aware that mesothelioma is not a life threatening illness. On the other hand, mesothelioma is one of...

Baby boom or bust — how Social Security will be affected by coronavirus lockdowns

Shelter-in-place has some Americans joking we may see the country’s next baby boom in nine months, but experts say it will likely be the...

How to Make a Children’s Bookwork Come Alive with Khalid

How to Make a Children's Bookwork Come Alive with KhalidKhalid, Ali Baba and the Forty Thieves are a gripping tale about the soul...
Home of Science
Follow me