Goldman Sachs Issues 2024 Stock Market Forecast
Goldman Sachs has unveiled the forecast for the S&P 500 and quite understandably, factors affecting stock expectations in the near term are also addressed. Investors will be focusing on issues like the future cuts in Federal Reserve interest rates, earning growth and what the economic outlooks will be, among others.
S&P 500 And Its Prices And Performance
The S&P 500 Index gained 18 % as at this time since the beginning of the year, but there is different picture regarding the further perspectives of the index. For example, as per the report from Convergex Group, S&P 500 companies’ earnings growth rates in EPS surged by an impressive 11.3% for the second quarter of 2023 only, but analysts project that the growth expectations will moderate moving forward. Yet, the market does continue expecting positive growth at a slower pace with a consensus 3Q17 EPS growth estimate of 4.9%.
Bears argue that with slowing economic growth, the stock market may be overvalued. However, some point to economic models from the Atlanta Federal Reserve, suggesting a potential rebound to 3% GDP growth by the end of the year.
Effect of Fed Rate Cuts on Equities
The sights of investors remain regularly focused on interest rate changes by the Federal Reserve. The goldman sachs economists anticipate that the fed may lower interest rates by a margin of twenty-five basis points (0.25%) in March 2024. Such a move will have different outcomes in relation to other economic conditions.
For instance, if the economy holds strong, adopting smaller cuts in policy rates might prove to be encouraging to the stock market since it implies that the economy is on a firmer footing. On the other hand, more cuts may be interpreted as the Fed central bank being aware of lower economic activity than they previously projected and this more risk may tilt investors capital away from the bourses.
Wening on the Stock Exchange From Goldman Sachs
Goldman Sachs holds the moderate position on the stock market. They cite that even in an environment of rising bond yields, the S&P 500 may be able to grow infructuously if earnings growth continues. The index is projected to be flat with the current figure. However, the index should close at 5600 at the end of the year. The target is 5700 for the sixth month, and 6000 for the year.
Goldman’s strategists Additionally, one of the important takeaways from Goldman’s strategists is that the speed of economic growth in the future will matter to stock prices more than the very rate cuts themselves. As their prediction states, as long as price-to-earnings multiples do not decline, it is assumed that total earnings will increase, thus helping bring the S&P 500 up.
Conclusion: Towards S&P500 2024 Insights
To conclude this article, Goldman Sachs stock market outlook for 2024 can be leaned towards a rather optimistic approach with an annual S&P 500 growth of 7%. From this perspective, while monetary easing from the Fed is likely to occur and be important, the focus will shift towards economic strength and earnings to drive the market forward.
