Goldman says U.S. stocks have probably bottomed

Goldman says U.S. stocks have probably bottomed
The unprecedented support from policymakers and a flattening viral curve have 'dramatically' cut risks to both markets and the economy, strategists say
APR 13, 2020
By  Bloomberg

U.S. stocks are unlikely to make fresh lows thanks to the “do whatever it takes” approach of policymakers, according to Goldman Sachs Group Inc.

A combination of unprecedented policy support and a flattening viral curve has “dramatically” cut risks to both markets and the American economy, strategists including David Kostin wrote in a note Monday. If the U.S. doesn’t have a second surge in infections after the economy reopens, equity markets are unlikely to make new lows, they said.

“The Fed and Congress have precluded the prospect of a complete economic collapse,” the strategists wrote. “These policy actions mean our previous near-term downside of 2,000 is no longer likely” for the S&P 500 Index.

The U.S. benchmark closed last Thursday around the 2,790 level, having hit a three-year low of 2,237 on March 23.

Goldman removes prediction for near-term S&P 500 downside to 2,000

Goldman cited policy measures including rate cuts, the Federal Reserve’s Commercial Paper Funding Facility and fiscal stimulus such as the $2 trillion Cares Act among the “numerous and increasingly powerful” actions that have spurred equity investors to take a risk-on view.

Meanwhile, the strategists expect investors to look through first-quarter results from the upcoming earnings season, and focus instead on the outlook for 2021, according to the note.

“Despite the likely steady stream of weak earnings reports, 1Q earnings season will not represent a major negative catalyst for equity market performance,” they wrote. “Our year-end S&P 500 target remains 3,000.”

Latest News

Social Security trustees see one less year in insolvency countdown, project shortfall to start 2034
Social Security trustees see one less year in insolvency countdown, project shortfall to start 2034

New report shows dimmed outlook for benefits to retirees and disabled Americans, creating further pressure for federal tax hikes or more borrowing.

NY Republican Stefanik presses SEC to probe Harvard bond sale
NY Republican Stefanik presses SEC to probe Harvard bond sale

Open letter to SEC Chair Paul Atkins questions whether the Ivy League university withheld material information prior to its $750 million taxable bond offering.

Ex-LPL leader re-emerges at The Wealth Consulting Group
Ex-LPL leader re-emerges at The Wealth Consulting Group

The Las Vegas-based hybrid RIA overseeing $8.8 billion in assets has named Andy Kalbaugh president to help scale its advisor platform.

Envestnet extends investment offerings with new alts model portfolios
Envestnet extends investment offerings with new alts model portfolios

The wealth tech giant – in collaboration with Fidelity, BlackRock, State Street, and Franklin Templeton – is offering its advisor and wealth firm users more ways to diversify.

Just as wealth industry M&A was picking up, economic uncertainty could kill it again
Just as wealth industry M&A was picking up, economic uncertainty could kill it again

Deal volume increased post-election but now caution has taken over.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.

SPONSORED Beyond the dashboard: Making wealth tech human

How intelliflo aims to solve advisors' top tech headaches—without sacrificing the personal touch clients crave