Could This New Project Top $1T?

This billionaire has predicted that his new venture - something I'm calling "X-9840" - could become "a trillion dollar company." Today, only three companies in the US are worth more than $2 trillion. Microsoft... Apple...and Nvidia. This has nothing to do with electric vehicles... Self-driving cars, rockets, brain chips, or satellites.

Stock Market Rally For 2024 Has Peaked, Goldman Sachs Forecasts 'Flat Return From Now Till The End Of The Year'

Benzinga Neuro
May 15, 2024

The stock market rally for 2024 has reached its peak, according to Goldman Sachs. The firm’s chief U.S. equity strategist, David Kostin, has predicted a flat return for the S&P 500 for the remainder of the year.

What Happened: Kostin mentioned in an interview with Bloomberg TV that there is no economic, valuation, or earnings rationale for additional upside. The S&P 500 has already surpassed Goldman’s year-end target of 5,200.

This suggests “a flat return from now till the end of the year,” Kostin said, leaving open the possibility for a change in forecast if variables change.

Goldman’s team currently projects real GDP growth of just under 3% and earnings growth of about 8%. However, valuations are currently high and unlikely to boost stocks further.

“They’re at an index level basis almost 21 times earnings. So the probability of a multiple expansion, while possible, is less probable,” Kostin said. “The idea of earnings being much greater than we’re assuming we think is pretty low.”

See Also: ‘Big Short’ Fame Investor Expects Elon Musk’s Tesla Shares To Plunge 70%: ‘People Are Going To Start To Lose Patience’

Despite this, Kostin hasn’t entirely dismissed the possibility of a bullish turnaround. He noted that if the Federal Reserve has to cut interest rates more dramatically than assumed, this could lead to more upside. However, Goldman’s base case still considers two cuts as the most likely scenario for this year.

Why It Matters: Recently, the stock market showed a bullish signal, with the S&P 500 and the NYSE advance-decline lines hitting new all-time highs. This was seen as a leading indicator by technical analysts. However, Kostin’s recent comments suggest that this bullish trend may not continue.

Meanwhile, Mohamed El-Erian, the Chief Economic Advisor at Allianz, has suggested that the latest inflation data could prompt the U.S. Federal Reserve to consider an earlier interest rate cut, potentially boosting bond and equity prices. This could be a factor in the stock market’s future performance.

Additionally, investment strategist Ed Yardeni has warned that the Fed’s potential monetary easing through interest rate cuts could lead to a stock market melt-up, potentially propelling the S&P 500 to record highs by the year’s end.

Read Next: Chuck Schumer Says Trump Might Be ‘Hosting Dinners For Big Oil Execs’ But FTC Should Side With Consumers On $53B Chevron-Hess Merger

Image Via Shutterstock


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