Goldman Sachs raises its outlook for the S&P 500, and Morgan Stanley remains a “bear”

Goldman Sachs raises its outlook for the S&P 500, and Morgan Stanley remains a “bear”

The S&P 500 entered the so-called “bullish territory” last week after rising more than 20 percent since bottoming out last October, but prominent Wall Street strategists are divided on the future direction, according to reports. bloomberg.

Strategists at Goldman Sachs, led by David Kostin, now believe that the broader US index will stand at 4,500 at the end of 2023. The forecast, which points to a 5 percent gain from Friday’s close, is an upward revision from the previously estimated figure of 4,000.

It follows a broader march

“Previous cases in which the scope for recovery narrowed sharply were followed by a broader reassessment of valuations,” the news agency said in a note dated June 9.

The optimist: Goldman Sachs strategist David Kosten. Image: Bloomberg

Thus, analysts envision that US equity markets will rise further, primarily by other sectors catching up to the tech sector’s fiery rally.

Goldman’s predictions stand in stark contrast to Morgan Stanley and chief strategist Michael Wilson, who instead referred to the “bear market” of the 1940s when the S&P 500 rose 24 percent before dropping to new lows.

“Many are declaring that the ‘bear market’ is officially over.” We respectfully disagree with our earnings outlook in 2023,” Wilson wrote, according to Bloomberg, in a note.

Track earnings decline

The Morgan Stanley strategist expects earnings for S&P 500 companies to fall 16% from 2022 to 2023, before rising sharply again in 2024. By comparison, a survey of analysts by Bloomberg suggests earnings will drop just 2.4% in 2023.

Wilson is known as one of the most negative voices on Wall Street, but he’s staying put in 2022 Voted the best strategist in the world by Institutional Investor for accurately predicting the sharp decline in the stock market in the past year. So far, predicting another drop in 2023 has been proven wrong.

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The strategist predicted at the beginning of 2023 that the S&P 500 would drop to 3000-3300 points in the first quarter of 2023. When the quarter ended, the index was at 4109.31.

According to the news agency, the story appears to be from David Kosten and his colleagues at Goldman. Last week, Bank of America strategist Savita Subramanian highlighted an analysis showing that since the 1950s, the S&P 500 has risen 92 percent of the 12-month periods after confirming a “bullish market.”

Dalila Awolowo

Dalila Awolowo

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