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Goldman Sachs has raised its U.S. recession probability from 20% to 35%, reflecting a significant shift in economic outlook, now incorporating a "stagflationary twist." The firm projects inflation to reach 3.5% in 2025 and GDP growth to slow to 1.0%. Market sentiment remains cautious ahead of upcoming tariff announcements and key economic reports.
UBS Global Wealth Management has revised its 2025 S&P 500 target down to 6,400 from 6,600, citing concerns over U.S. tariffs impacting economic growth and corporate profits. The firm also lowered its earnings estimate for S&P 500 companies to $265 per share, despite maintaining a positive outlook on U.S. stocks. Analysts have a Moderate Buy consensus on the SPDR S&P 500 ETF Trust (SPY), with a price target suggesting a 23.9% upside potential.
Goldman Sachs warns that President Trump's upcoming tariff rates could be significantly higher than market expectations, potentially reaching 15%–20%. This strategy may mirror past tactics where initial steep tariffs were later moderated. The administration's approach could shock investors, especially as it reviews 19 countries for a reciprocal tariff framework that accounts for various economic factors.
Investors poured cash into U.S. equities at the third-highest rate in history, with Bank of America characterizing the trend as a "correction, not a bear market." Despite a significant rebound in the S&P 500, major indices are on track for their longest losing streak since May 2022, driven by recession concerns and mixed economic forecasts. Analysts suggest that if the economy avoids recession, the potential for growth could significantly outweigh the risks.
Michael Zinn, a senior portfolio manager at UBS Global Wealth Management, noted that the Santa Claus rally is experiencing a pause after a significant post-election surge, describing it as "indigestion." He highlighted concerns over the market's narrow breadth, with only 40% of S&P stocks above their 50-day moving average, despite rising indexes. However, Zinn remains optimistic about long-term prospects due to factors like AI advancements and economic growth, supported by strong consumer demand reflected in November retail sales hitting an 11-month high.
The fourth quarter historically offers strong opportunities for traders, particularly in the S&P 500, driven by seasonal trends, increased holiday spending, and investor optimism. With a 93% occurrence rate of positive returns and minimal drawdowns in December, traders can leverage ETFs like SPY and futures contracts like ES and ET for potential gains. However, a balanced strategy incorporating risk management and market analysis is essential for success during this period.
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Goldman Sachs Raises US Recession Risk Amid Stagflation Concerns and Tariff Uncertainty
United States Dollar
Allianz SE
Invesco QQQ Trust
The Goldman Sachs Group, Inc.
SPDR Dow Jones Industrial Average ETF Trust
SPDR S&P 500 ETF Trust
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Donald Trump
Jerome Powell
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Mohamed A. El-Erian
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06:00 31.03.2025
ubs lowers s and p 500 forecast amid tariff concerns and market volatility
United States Dollar
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The Goldman Sachs Group, Inc.
Barclays PLC
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Donald Trump
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01:58 28.03.2025
goldman sachs warns of potential tariff shock under trump administration
United States Dollar
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USA
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14:18 25.03.2025
investors pour cash into equities amid market correction signals from bank of america
United States Dollar
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Bank of America Corporation
USA
Chris Zaccarelli
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04:13 17.03.2025
market faces pause amid santa claus rally concerns says UBS expert
10:12 18.12.2024
seasonal trading opportunities in the s and p 500 for december
20:00 09.12.2024
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