Goldman Sachs Expects Stock Market Surge
Goldman Sachs expects the S&P 500 to surge to 5,200, on the back of strong corporate earnings. Has it ignored some risks?
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Goldman Sachs expects the S&P 500 to surge to 5,200. It is at 5,000 now. The increase would appear tame at first, but on a second look, it is not.
The S&P 500 has already had a remarkable run. A year ago, the index stood at 4,000. There has to be a correction. Markets rarely run so hot and so fast. Goldman thinks this market will defy gravity. That is, at least in the short and medium term.
Goldman believes the increase will be earnings-based. Earnings were fairly good last year. However, any increase will be based on the stocks that drive the market (Apple, Microsoft, Meta, Nvidia, Amazon, and Alphabet). If one or more stumbles badly, the Goldman forecast is in jeopardy. Reuters described the Goldman prediction this way: “Goldman on Friday forecast an 8% profit increase for S&P 500 companies this year, fuelled by an improved U.S. economic outlook and stronger mega-cap profit margins.”
What the Goldman forecast does not take into account is a recession or geopolitical risk. The United States dodged a recession last year. Some economists believe that a downturn is inevitable because interest rates remain high. Mortgage rates could slow real estate transactions. And expensive items like cars can cost too much for people to do any more than hold an old car for another year or so. (This is the hottest housing market in America.)
And there are risks of Middle East turmoil, tensions around Taiwan, and a lockdown of the Suez Canal, which would tighten supply chains. Could the world avoid all these for another year? If not, the Goldman Sachs forecast could be wrong.
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Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.
McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.
His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.
A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.
TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.
McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.
