Goldman says U.S. stocks have probably bottomed

Goldman says U.S. stocks have probably bottomed
The unprecedented support from policymakers and a flattening viral curve have 'dramatically' cut risks to both markets and the economy, strategists say
APR 13, 2020

U.S. stocks are unlikely to make fresh lows thanks to the “do whatever it takes” approach of policymakers, according to Goldman Sachs Group Inc.

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 last Thursday around the 2,790 level, having hit a three-year low of 2,237 on March 23.

Goldman removes prediction for near-term S&P 500 downside to 2,000

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.”

Latest News

Florida B-D, RIA owner pitches bold long-term plan to sell to advisors
Florida B-D, RIA owner pitches bold long-term plan to sell to advisors

IFP Securities’ owner, Bill Hamm, has a long-term plan for the firm and its 279 financial advisors.

Fiduciary failure: Ex-advisor who sold practice fined after clients lost millions
Fiduciary failure: Ex-advisor who sold practice fined after clients lost millions

A former Alabama investment advisor and ex-Kestra rep has been permanently barred and penalized after clients he promised to protect got caught in a $2.6 million fraud.

Why the evolution of ETFs is changing the due diligence equation
Why the evolution of ETFs is changing the due diligence equation

As more active strategies get packaged into the ETF wrapper, advisors and investors have to look beyond expense ratios as the benchmark for value.

Most asset managers are using AI, but few let it call the shots
Most asset managers are using AI, but few let it call the shots

Survey finds AI widely embedded in research and analysis, but barely touching portfolio construction or trade execution.

LPL, Raymond James score fresh recruits in advisor recruiting battle
LPL, Raymond James score fresh recruits in advisor recruiting battle

Two firms land teams managing more than $1.1 billion in combined assets from Kestra and Edward Jones.

SPONSORED Are hedge funds the missing ingredient?

Wellington explores how multi strategy hedge funds may enhance diversification

SPONSORED Beyond wealth management: Why the future of advice is becoming more human

As technical expertise becomes increasingly commoditized, advisors who can integrate strategy, relationships, and specialized expertise into a cohesive client experience will define the next era of wealth management