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Goldman Sachs has revised its year-end target for the S&P 500 to 5,700 points, marking an 8% decrease from its earlier estimate of 6,200. Chief U.S. Equity Strategist David Kostin cited heightened recession risks and tariff uncertainties as key factors for this downgrade, warning that further deterioration in growth outlook could lead to even steeper declines in valuations. The new target suggests a modest 2% gain for the index this year, reflecting one of the most bearish forecasts on Wall Street.
Goldman Sachs has cut its S&P 500 target for the second time this month, now forecasting a year-end level of 5,700 points, down from 6,200, due to heightened recession risks and tariff uncertainties. The revised target suggests only a 2% gain from recent levels, reflecting concerns over slowing growth and rising equity risk premiums.Additionally, the firm has increased its tariff assumptions and lowered its 2025 GDP growth forecast to 1%, indicating a more pessimistic outlook for the U.S. economy amid ongoing trade tensions.
Goldman Sachs has revised its S&P 500 target downward for the second time this month, now forecasting a year-end close of 5,700 points, down from 6,200. This adjustment reflects increased recession risks and uncertainties surrounding tariffs, suggesting only a 2% gain from recent levels. The new target is among the lowest on Wall Street, according to Bloomberg.
Goldman Sachs has again lowered its S&P 500 target, now forecasting a year-end close of approximately 5,700 points, down from 6,200, amid rising recession fears and tariff uncertainties. Strategist David Kostin warns that continued economic slowdown could lead to even lower valuations. Additionally, the firm has revised its 2025 U.S. GDP growth forecast down to 1% and increased tariff projections significantly.
The US stock market is experiencing unprecedented concentration, with just 26 stocks accounting for half the S&P 500's value, raising concerns about diversification and risk. While mega-cap tech firms have driven high profit growth, their elevated valuations may lead to greater volatility and lower long-term returns. Investors should be cautious, as the current market structure resembles an inverted pyramid, heavily reliant on a few companies.
US stocks showed mixed results as the Dow slid 0.3% while the Nasdaq rose over 0.3%, driven by a 5% jump in Alphabet shares following advancements in quantum computing. Investors await key consumer inflation data, which could influence interest rate decisions. Meanwhile, small business optimism surged to its highest level since June 2021, reflecting a significant shift in economic sentiment post-election.
Uncertainty looms for macro forecasters and investors as a new administration signals significant policy shifts in tariffs, immigration, and government scope. Key concerns include the labor market outlook, inflation, and the implications of high stock valuations and market concentration, alongside the unpredictable impact of AI. Jan Hatzius and David Kostin from Goldman Sachs share their insights on navigating these challenges in the coming year.
Wall Street anticipates a surge in mergers and acquisitions under a potential second Trump administration, driven by a more favorable regulatory environment and recent interest rate cuts. Analysts predict a 20% increase in M&A volume in 2025, particularly in technology, healthcare, and consumer staples sectors, as mid-cap companies become attractive targets for acquirers seeking growth and value.
[Bloomberg]
Nvidia"s upcoming earnings report is generating significant anticipation, overshadowing geopolitical tensions, including Russia"s warning of a nuclear response to Ukraine"s missile strikes. U.S. markets showed resilience, with the S&P 500 and Nasdaq closing higher, while Qualcomm projected $22 billion in additional annual revenue by 2029. Investors are keenly focused on Nvidia"s performance and its next-generation Blackwell chips, which are critical for maintaining its lead in the AI chip market.
David Kostin
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