Goldman Sachs Boosts Expectations for S&P 500 Index until 2023

Investing.com – Analysts at Goldman Sachs (NYSE:) boosted their expectations for the “” index until the end of 2023, noting that the expected rise in US stocks will not be limited to major technology companies.

The bank’s analysts, including David J. Kostin, said in a research note dated June 9 that the index would end 2023 at 4,500, compared to a previous forecast of 4,000.

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This means an increase of 4.7% compared to last Friday’s closing level, and nearly half of the return that consensus forecasts over the next 12 months, according to Bloomberg.

Analysts predicted a rise in a broad range of stocks, not just technology companies, as historical precedents saw a narrowing of the gap between stocks followed convergence in other sectors of technology thanks to a broader revaluation. Since 1980, the index witnessed 9 major precedents in which this scenario was repeated, followed by other stocks converging on the level of technology companies, which eventually gave a boost to the entire index.

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The index rose 20% compared to its lowest level recorded last October, thus joining the “Stoxx Europe 600”, “German” and “South Korean” indices, which entered the fifth emerging market in nearly three decades.

Expectations of a temporary cessation of interest rate hikes and strong profitability for index stocks have allayed concerns about persistent inflation and slowing growth. Signs of an expanding recovery are also emerging, with the Russell 2000 outperforming the Standard & Poor’s 500 since the beginning of June.

On the tenth of last February, Costin and his colleagues advised investors to buy European and Asian stocks instead of their American counterparts during the current year, due to the expected decline in corporate profits during 2023. But since then, the “Standard & Poor’s 500” index has risen by 5.1%, while the Other major indicators in Asia and Europe changed little.

other predictions

Goldman’s predictions for the S&P 500 to achieve greater returns align with those of Bank of America analyst Savita Subramanian, whose analysis shows that the US benchmark extended its 12-month gains after passing the 20% bull market entry point. 92% of the time, I inferred from data back in the 1950s.

However, on the other hand, there are still doubts about the rise of the index on the part of Michael Wilson, an analyst at “Morgan Stanley”, who was one of the few analysts on “Wall Street” who predicted a collapse of stocks during 2022, which led to his ranking first in a survey conducted by the magazine ” Institutional Investor” last year, where Wilson sees the narrow range of the rally as a warning sign, along with high valuations and outperformance of defensive stocks.

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