The financial giant Goldman Sachs thinks the S&P 500 has more room to run.
A team of analysts led by David Kostin, Goldman’s chief US equity strategist, predicts the S&P 500 will witness returns of 2% in three months, 5% over six months and 8% in the next 12 months, implying index levels of 6,800, 7,000, and 7,200.
The leading equity index is trading at 6,648.46 at time of writing.
Kostin notes on LinkedIn that their forecast follows historical patterns during rate cut cycles.
“During the past 40 years, the S&P 500 has generated a 15% median 12-month return when the Fed resumed cutting rates against a backdrop of continued economic growth.”
The Federal Open Market Committee (FOMC) cut the federal funds rate by 25 basis points last week, and traders believe it’s likely the Federal Reserve will cut rates again at each of its final two FOMC meetings of the year.
Kostin also notes that earnings have driven the majority of the S&P 500’s 13% gains year-to-date.
“With our baseline economic and Fed forecasts largely reflected in market pricing, we expect earnings will continue to be the primary driver of equity prices from here. However, light investor positioning adds to the tactical upside case for stocks if the macro backdrop remains friendly. Despite the S&P 500 at a record high, our Sentiment Indicator of equity investor positioning stands at -0.3.”
Follow us on X, Facebook and Telegram
Don’t Miss a Beat – Subscribe to get email alerts delivered directly to your inbox
Check Price Action
Surf The Daily Hodl Mix
 
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Generated Image: Midjourney