Goldman’s forecast for US stocks for 2024

Goldman’s forecast for US stocks for 2024

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Alphaville remains disappointed by the continued lack of sell-side “just close the damn door” signals, despite our promise of a special prize for the first to post them.

But Goldman Sachs’ David Kostin managed to work in several Taylor Swift references in his 2024 forecast, and for traffic reasons this is probably for the best, so here we are.

The report – titled “All You Have to Do is Survive” – ​​examines Goldman’s outlook for US stocks, informed mostly by the investment bank’s impressive outlook for the economy and Kostin’s estimate of Tai Tai.

The launch of singer-songwriter Taylor Swift’s “Eras” tour represented one of the cultural highlights of 2023. Global ticket sales are expected to exceed $1 billion. The economic multiplier effect of the round is significant. As evidence, the Philadelphia Fed specifically noted in a recent Beige Book commentary that “May was the strongest month for hotel revenues in Philadelphia since the start of the pandemic, due in large part to an influx of guests attending Taylor Swift concerts.” in the city.”

The Eras round will conclude in late November 2024, which roughly corresponds to the 12-month horizon of the market forecasts in this report. In honor of the global icon, we have US stock forecasts for 2024 Titled “All You Had to Do Was Survive” – Investor. Song title from Taylor Swift 1989 The album reflects our fundamental expectation that despite choppy volatility, fund managers will ultimately be rewarded for continuing to invest through the end of next year.

Yes, it’s a twisted reference. But FTAV is in no position to throw stones. If you want more details, you can find the full report here.

In essence, the GS forecast is well suited to the classic sell-side forecasting pattern of either “higher, then lower” or “lower, then higher” (with the notable exception being Tom “higher, then higher” and Lee and Albert “lower”, then FOBAR Edwards ).

Here’s the US stock story (sorry) in chart form:

That’s because Kostin believes still-resilient economic growth and a looming presidential election will make investors cautious in the first half of 2024, but the actual elections and first interest rate cuts will force investors to unwind and push them back into stocks (markets are weird). . , Yes). The end game is the S&P 500 at 4,700.

But the 5 percent overall gain that Kostin expects means we will never return to the January 2022 high (at least next year). If you thought the AI ​​craze might get us out of the woods, Costin has some bad news, at least in the near term.

Generative artificial intelligence (AI) is one potential driver of higher corporate profits, but in most cases it will have a limited impact on profitability next year. Some companies have been clear near-term beneficiaries of AI-driven demand for computing power to run large AI language models. There are other companies that are likely to benefit in the long term, and may see an increase in earnings per share from the impact of AI adoption on labor productivity in the coming years.

Okay, enough of the painful quick mentions. Goldman’s forecast is reasonably consistent with what we’ve seen so far from the rest of the sell side, with the caveat that next year’s forecast tsunami is just beginning.

UBS also expects the S&P 500 to reach 4,700 at the end of 2024, and Wells Fargo has a target range of 4,600 to 4,800, which is a non-fancy way of saying “4,700, maybe, I don’t know.” Morgan Stanley’s Mike Wilson is a bit more gloomy, predicting it will end flat this year at 4,500.

In other “news” – and we know this will come as a big surprise to some Alphaville readers – Pimco thinks stocks are a bit expensive, but bonds look absolutely fantastic.

In fact, the world’s largest fixed income-focused investment group “strongly” favors fixed income, believes the case for fixed income is “compelling,” and sees this as “an optimal time to consider fixed income weighting in asset allocation portfolios,” according to its market outlook. For 2024. So there it is.

In-depth reading:

– Why is it difficult to know how much money Taylor Swift makes? (fataf)

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