The firm’s team of strategists, led by David Kostin, expect the valuations of megacap tech companies to continue their expansion, thereby potentially sending the index to 6,000 by year-end, reaching a forward price-to-earnings ratio of 23.

“Although AI optimism appears high, long-term growth expectations and valuations for the largest TMT stocks are still far from ‘bubble’ territory,” the team of strategists observed in a note to investors. Closing at 5,234.18 on Friday, the S&P 500 is up by almost 10% this year.

The post Goldman Sticks With S&P 500 Year-End Forecast of 5,200 Amid Strong Economic Data appeared first on theprimarymarket.com.

In mid-December, a 5,100 close was predicted, with the target thus lifted by about 2% since. This is also a 3.9% jump from Friday’s close and a significant rise from the 4,700 set by Kostin’s team in November. “Increased profit estimates are the driver of the revision,” the team said of the adjustment in a note to clients.

The S&P 500 has risen by approximately 4.9% since the start of the year, with further increases expected amid expected interest rate cuts by the Federal Reserve and a projected artificial intelligence boom that is expected to lift tech stocks. Profits for companies listed in the index are expected to grow by 8.8% in 2024 compared to the previous year.

The post Goldman Sachs Lifts S&P 500 Target Amid Rising Performance appeared first on theprimarymarket.com.

The company’s net income of $8.52 billion for 2023 marked a 24% slump from the previous year, which is also its worst performance since David Solomon’s first year as CEO, when the company earned $8.46 billion. Still, the firm’s profit rose during the final quarter of 2023, with Goldman Sachs earning $2 billion over the three months ended December. This is a colossal 51% rise from the fourth quarter of 2022.

Goldman’s investment banking revenues for the fourth quarter were $3.6 billion; a 6% rise from Q3 yet still 12% lower than the fourth quarter of 2022. Data from Dealogic showed that full-year investment banking revenue was at its lowest point since 2013. Still, 2023 proved to be a challenging year economically for the industry at large, with Goldman Sachs still outperforming Wall Street rivals JPMorgan, Bank of America, Morgan Stanley, and Citi in terms of Q4 investment banking earnings.

The post Goldman Sachs Posts 51% Gain in Year-On-Year Quarterly Earnings appeared first on theprimarymarket.com.

According to data compiled by Bloomberg, the 20 Wall Street strategists tracked by the financial news outlet project the S&P 500 to finish 2024 at 4,850, just under 2% more than 2023. Still, there is a major deviation between more optimistic strategists such as Oppenheimer and Funstrat, who are predicting a 5,200 finish, and conservative strategists such as JPMorgan, who posted a forecast of 4,200.

Goldman Sachs strategists decided to boost their forecasts following the two-month rally amid rising investor confidence. “Resilient growth and falling rates should benefit stocks with weaker balance sheets, particularly those that are sensitive to economic growth,” Goldman Sachs chief US equity strategist David Kostin wrote in a note to investors. The firm has posted a 2024 forecast of 5,100 for the benchmark index.

JPMorgan retains a hawkish outlook, however, forecasting a 12% decline for the S&P 500. “Absent rapid Fed easing, we expect a more challenging macro backdrop for stocks next year with softening consumer trends at a time when investor positioning and sentiment have mostly reversed,” the firm’s team of analysts wrote in its 2024 outlook report.

The post Leading Strategists Reveal 2024 S&P 500 Forecasts appeared first on theprimarymarket.com.

“The change does not reflect any major shift in our thinking but rather that the rough thresholds for cutting that we have given previously are now reached earlier,” the Goldman Sachs team wrote in a note explaining their adjusted forecast. The firm’s economists now expect inflation to fall sooner next year than initially projected.

Inflation as measured by the Fed’s preferred inflation gauge, the core Personal Consumption Expenditures index, is expected to hit 2.5% by the second quarter of next year. Originally, Goldman Sachs expected this figure to be realized by the fourth quarter of 2024. While still above the Fed’s 2% target, inflation has continued to show signs of movement toward this figure, with core PCE at 3.5% in October.

The post Goldman Sachs Expects Fed Rate Cut By July 2024 appeared first on theprimarymarket.com.

“Although we expect headwinds to discount rates and balance sheets to persist, we would view a substantial further downgrade to the growth outlook as a buying opportunity,” Goldman Sachs strategists wrote.

The team of analysts is expecting the S&P 500 to end 2023 at 4,500, slightly outpacing the 4,370 average expected among analysts tracked by Bloomberg. The index closed at 4,117.37 on Friday, down 10% from its 2023 peak reach in late July of 4,567.46.

The post Declining U.S. Growth Could Boost Stocks, Goldman Sachs appeared first on theprimarymarket.com.

On the back of rising bond yields and lowering economic growth expectations, stocks on the S&P 500 index have fallen by about 6.5% since the start of the year. The tech-heavy Nasdaq Composite also experienced its steepest monthly decline in September.

“In the new ‘higher for longer’ rates environment, the key risk for S&P 500 ROE will be higher interest expenses and lower leverage,” the Goldman analysts observed. “A scenario in which interest expense and leverage persistently weigh on ROE would be a departure from the historical trend.”

While higher rates remain a concern, stocks that analysts have identified as having low vulnerability against rising rates include Cisco Systems Inc., Costco Wholesale Corp., Cognizant Technology Solutions Corp., Paychex Inc., and Visa Inc.

The post Higher Rates Affecting Profits, Goldman Analysts Warn appeared first on theprimarymarket.com.

“While we forecast consumption growth to slow during the fall and winter, we think higher oil prices are unlikely to cause consumer spending and GDP to decline,” Goldman’s chief economist Jan Hatzius wrote in a note to consumers, explaining that the level of change in prices is small compared to 2008 and the first half of 2022.

According to the Goldman Sachs team, the Federal Reserve is unlikely to adjust its fiscal policy in response to changes in oil prices, particularly since core inflation and inflation expectations are on the decline.

The post Higher Oil Prices are “Manageable” Economic Concern, Goldman Sachs appeared first on theprimarymarket.com.

The Federal Reserve decided to keep interest rates unchanged at its meeting on Wednesday, thereby holding them within the 5.25% to 5.5% range. They are currently expected to cut interest rates by a total of 50 basis points next year as opposed to previous estimates of a full percentage point.

“We think this means that inflation will have to fall further than we previously assumed for the FOMC to cut.” Goldman Sachs economists led by Jan Hatzius wrote in a note, explaining the change to their initial forecasts. Several other financial giants disagree with Goldman Sachs’ assessment, however. Barclays is expecting an interest rate cut in each of the Fed’s final three meetings of 2024, while Morgan Stanley expects the first cut to be delivered as soon as March next year.

The post Goldman Sachs Forecasts Fed Rate Cut in Q4 Of 2024 appeared first on theprimarymarket.com.

“On November, we think that further labor market rebalancing, better news on inflation, and the likely upcoming Q4 growth pothole will convince more participants that the FOMC (Federal Open Market Committee) can forgo a final hike this year, as we think it ultimately will,” the investment bank’s strategists observed in a report.

According to CME Group’s FedWatch Tool, markets have priced a 98% chance that interest rate would remain unchanged in September. In terms of the Fed’s November meeting, there is currently a 72% probability that interest rates would remain unchanged.

The post Fed Unlikely to Raise Rates in November, Goldman Sachs appeared first on theprimarymarket.com.

The firm’s team of strategists, led by David Kostin, expect the valuations of megacap tech companies to continue their expansion, thereby potentially sending the index to 6,000 by year-end, reaching a forward price-to-earnings ratio of 23.

“Although AI optimism appears high, long-term growth expectations and valuations for the largest TMT stocks are still far from ‘bubble’ territory,” the team of strategists observed in a note to investors. Closing at 5,234.18 on Friday, the S&P 500 is up by almost 10% this year.

The post Goldman Sticks With S&P 500 Year-End Forecast of 5,200 Amid Strong Economic Data appeared first on theprimarymarket.com.

In mid-December, a 5,100 close was predicted, with the target thus lifted by about 2% since. This is also a 3.9% jump from Friday’s close and a significant rise from the 4,700 set by Kostin’s team in November. “Increased profit estimates are the driver of the revision,” the team said of the adjustment in a note to clients.

The S&P 500 has risen by approximately 4.9% since the start of the year, with further increases expected amid expected interest rate cuts by the Federal Reserve and a projected artificial intelligence boom that is expected to lift tech stocks. Profits for companies listed in the index are expected to grow by 8.8% in 2024 compared to the previous year.

The post Goldman Sachs Lifts S&P 500 Target Amid Rising Performance appeared first on theprimarymarket.com.

The company’s net income of $8.52 billion for 2023 marked a 24% slump from the previous year, which is also its worst performance since David Solomon’s first year as CEO, when the company earned $8.46 billion. Still, the firm’s profit rose during the final quarter of 2023, with Goldman Sachs earning $2 billion over the three months ended December. This is a colossal 51% rise from the fourth quarter of 2022.

Goldman’s investment banking revenues for the fourth quarter were $3.6 billion; a 6% rise from Q3 yet still 12% lower than the fourth quarter of 2022. Data from Dealogic showed that full-year investment banking revenue was at its lowest point since 2013. Still, 2023 proved to be a challenging year economically for the industry at large, with Goldman Sachs still outperforming Wall Street rivals JPMorgan, Bank of America, Morgan Stanley, and Citi in terms of Q4 investment banking earnings.

The post Goldman Sachs Posts 51% Gain in Year-On-Year Quarterly Earnings appeared first on theprimarymarket.com.

According to data compiled by Bloomberg, the 20 Wall Street strategists tracked by the financial news outlet project the S&P 500 to finish 2024 at 4,850, just under 2% more than 2023. Still, there is a major deviation between more optimistic strategists such as Oppenheimer and Funstrat, who are predicting a 5,200 finish, and conservative strategists such as JPMorgan, who posted a forecast of 4,200.

Goldman Sachs strategists decided to boost their forecasts following the two-month rally amid rising investor confidence. “Resilient growth and falling rates should benefit stocks with weaker balance sheets, particularly those that are sensitive to economic growth,” Goldman Sachs chief US equity strategist David Kostin wrote in a note to investors. The firm has posted a 2024 forecast of 5,100 for the benchmark index.

JPMorgan retains a hawkish outlook, however, forecasting a 12% decline for the S&P 500. “Absent rapid Fed easing, we expect a more challenging macro backdrop for stocks next year with softening consumer trends at a time when investor positioning and sentiment have mostly reversed,” the firm’s team of analysts wrote in its 2024 outlook report.

The post Leading Strategists Reveal 2024 S&P 500 Forecasts appeared first on theprimarymarket.com.

“The change does not reflect any major shift in our thinking but rather that the rough thresholds for cutting that we have given previously are now reached earlier,” the Goldman Sachs team wrote in a note explaining their adjusted forecast. The firm’s economists now expect inflation to fall sooner next year than initially projected.

Inflation as measured by the Fed’s preferred inflation gauge, the core Personal Consumption Expenditures index, is expected to hit 2.5% by the second quarter of next year. Originally, Goldman Sachs expected this figure to be realized by the fourth quarter of 2024. While still above the Fed’s 2% target, inflation has continued to show signs of movement toward this figure, with core PCE at 3.5% in October.

The post Goldman Sachs Expects Fed Rate Cut By July 2024 appeared first on theprimarymarket.com.

“Although we expect headwinds to discount rates and balance sheets to persist, we would view a substantial further downgrade to the growth outlook as a buying opportunity,” Goldman Sachs strategists wrote.

The team of analysts is expecting the S&P 500 to end 2023 at 4,500, slightly outpacing the 4,370 average expected among analysts tracked by Bloomberg. The index closed at 4,117.37 on Friday, down 10% from its 2023 peak reach in late July of 4,567.46.

The post Declining U.S. Growth Could Boost Stocks, Goldman Sachs appeared first on theprimarymarket.com.

On the back of rising bond yields and lowering economic growth expectations, stocks on the S&P 500 index have fallen by about 6.5% since the start of the year. The tech-heavy Nasdaq Composite also experienced its steepest monthly decline in September.

“In the new ‘higher for longer’ rates environment, the key risk for S&P 500 ROE will be higher interest expenses and lower leverage,” the Goldman analysts observed. “A scenario in which interest expense and leverage persistently weigh on ROE would be a departure from the historical trend.”

While higher rates remain a concern, stocks that analysts have identified as having low vulnerability against rising rates include Cisco Systems Inc., Costco Wholesale Corp., Cognizant Technology Solutions Corp., Paychex Inc., and Visa Inc.

The post Higher Rates Affecting Profits, Goldman Analysts Warn appeared first on theprimarymarket.com.

“While we forecast consumption growth to slow during the fall and winter, we think higher oil prices are unlikely to cause consumer spending and GDP to decline,” Goldman’s chief economist Jan Hatzius wrote in a note to consumers, explaining that the level of change in prices is small compared to 2008 and the first half of 2022.

According to the Goldman Sachs team, the Federal Reserve is unlikely to adjust its fiscal policy in response to changes in oil prices, particularly since core inflation and inflation expectations are on the decline.

The post Higher Oil Prices are “Manageable” Economic Concern, Goldman Sachs appeared first on theprimarymarket.com.

The Federal Reserve decided to keep interest rates unchanged at its meeting on Wednesday, thereby holding them within the 5.25% to 5.5% range. They are currently expected to cut interest rates by a total of 50 basis points next year as opposed to previous estimates of a full percentage point.

“We think this means that inflation will have to fall further than we previously assumed for the FOMC to cut.” Goldman Sachs economists led by Jan Hatzius wrote in a note, explaining the change to their initial forecasts. Several other financial giants disagree with Goldman Sachs’ assessment, however. Barclays is expecting an interest rate cut in each of the Fed’s final three meetings of 2024, while Morgan Stanley expects the first cut to be delivered as soon as March next year.

The post Goldman Sachs Forecasts Fed Rate Cut in Q4 Of 2024 appeared first on theprimarymarket.com.

“On November, we think that further labor market rebalancing, better news on inflation, and the likely upcoming Q4 growth pothole will convince more participants that the FOMC (Federal Open Market Committee) can forgo a final hike this year, as we think it ultimately will,” the investment bank’s strategists observed in a report.

According to CME Group’s FedWatch Tool, markets have priced a 98% chance that interest rate would remain unchanged in September. In terms of the Fed’s November meeting, there is currently a 72% probability that interest rates would remain unchanged.

The post Fed Unlikely to Raise Rates in November, Goldman Sachs appeared first on theprimarymarket.com.