Financial Associated Press, May 16 (editor Liu Rui) at a time when the three major indexes of US stocks once again set a new record highThedeadman'shandGoldman Sachs poured cold water on the market: the rally in U. S. stocks is expected to be over this year.
Goldman Sachs has set a year-end target for the S & P 500 at 5200. However, earlier this month,Thedeadman'shandThe S & P 500 index has already broken through this point. Kirstin believes that this roughly implies that the rally in US stocks has ended this year, and that "the trend of US stocks will be flat from now to the end of the year."
Goldman Sachs pours cold water on the occasion of new highs for US stocks
The latest CPI data released in the United States on Wednesday showed that inflation in the United States showed a cooling trend again. Affected by this, U. S. stocks opened higher on Wednesday, and the three major indexes closed at record highs. The S & P 500 is up 1 per cent on the day.Thedeadman'shand.17% to close at 5308 points.
However, at a time of euphoria, David Kirstin, chief US equity strategist at Goldman Sachs, said that with the S & P 500 now higher than Goldman's year-end forecast, the rally in US stocks this year is almost over.
At present, there is no reason to support further gains in US stocks in terms of economic fundamentals, stock market valuations or corporate earnings, he said in an interview.
He also pointed out that the capital flow model also shows that further gains in US stocks will be limited. Of course, he also stressed that if there are unexpected changes, he may also adjust his estimates.
There is no reason to support further gains in US stocks?
So far, Kirsty's team expects real GDP growth in the US to be slightly less than 3 per cent this year, while corporate earnings in the US will grow by about 8 per cent. At the same time, US stock valuations are currently high, which means US stocks are unlikely to gain further upward momentum.
At the index level, the earnings ratio of the US stock market is close to 21 times. Therefore, although the possibility of further rise exists, the possibility has been reduced. The possibility that corporate profits are much higher than we expected is also quite low. "
However, Kirstin has not completely abandoned the possibility of a bull market reversal in the stock market. He said that if the Fed had to cut interest rates more than expected, US stocks could have more room for upside-but that was not in Goldman's basic forecast scenario.
Is the Federal Reserve expected to cut interest rates twice this year?
Despite the comments that are not optimistic about the rising prospects of US stocks, so far, Goldman Sachs is still more optimistic about the Fed's interest rate cut.
Although inflation in the United States has cooled less than expected since the beginning of the year, Goldman Sachs still believes that the Fed is most likely to cut interest rates twice this year. After the release of the slightly lower-than-expected consumer price index (CPI) on Wednesday, Goldman Sachs barely changed its view on the outlook for the Fed's interest rate cut and the market outlook.
Kirstin reiterated that Goldman's "basic forecast scenario is that as the end of the year approaches, the price-to-earnings ratio of the US stock market will be near current levels or lower."
By contrast, other Wall Street institutions are slightly more optimistic about the outlook for U. S. stocks than Goldman Sachs. For example, UBS, which also set the year-end target for the S & P at 5200, recently suggested that the S & P could also reach 5500, provided inflation continues to cool and spending momentum in artificial intelligence remains the same.