Goldman Says U.S. Stocks Have Likely Bottomed on Policy Support
Bloomberg
Published Apr 13, 2020 03:36AM ET
Updated Apr 13, 2020 04:18AM ET
Goldman Says U.S. Stocks Have Likely Bottomed on Policy Support
(Bloomberg) -- U.S. stocks are unlikely to make fresh lows thanks to the “do whatever it takes” approach of policy makers, according to Goldman Sachs Group Inc (NYSE:GS).
A combination of unprecedented policy support and a flattening viral curve has “dramatically” cut risks to both markets and the American economy, strategists including David Kostin wrote in a note Monday. If the U.S. doesn’t have a second surge in infections after the economy reopens, equity markets are unlikely to make new lows, they said.
“The Fed and Congress have precluded the prospect of a complete economic collapse,” the strategists wrote. “These policy actions mean our previous near-term downside of 2,000 is no longer likely” for the S&P 500 Index.
The U.S. benchmark closed Thursday around the 2,790 level, having hit a three-year low of 2,237 on March 23.
Goldman cited policy measures including rate cuts, the Federal Reserve’s Commercial Paper Funding Facility and fiscal stimulus such as the $2 trillion CARES act among the “numerous and increasingly powerful” actions that have spurred equity investors to take a risk-on view.
Meanwhile, the strategists expect investors to look through first-quarter results from the upcoming earnings season, and focus instead on the outlook for 2021, according to the note.
“Despite the likely steady stream of weak earnings reports, 1Q earnings season will not represent a major negative catalyst for equity market performance,” they wrote. “Our year-end S&P 500 target remains 3,000.”
©2020 Bloomberg L.P.
Get The News You Want
Written By: Bloomberg
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.