In its latest client note, Goldman Sachs analysts offer a constructive outlook for the S&P 500 index, citing a strong recovery in global earnings growth and lower cost of equity.
“Potential for “broader procyclical shift” in stocks, other assets to year end.”
“Still prefer “growth vs. value on a strategic horizon, but:
In the near term, elevated uncertainty on US elections and a better global growth outlook might benefit non-US equities more.”
“In the medium term a large weight in structural growth stocks is likely to support the S&P 500.”
“Near term risks include the when and how a coronavirus vaccine will be deployed:
- Diminishing US fiscal support.
- US election uncertainty.
- Rising COVID-19 cases.
- Oil price volatility.”
“The S&P 500’s falls were not due to any large pick-up in growth optimism but to further declines in real yields.”