Goldman Sachs Group Inc. strategists said U.S. corporate profits in 2024 could exceed current forecasts, driven by a strong economy and Federal Reserve interest rate cuts.
A team led by David Kostin, the bank’s chief U.S. equity strategist, predicted in a weekly research report thatS&P 500 IndexConstituent earnings per share are expected to grow 5% this year to $237.
That’s above the $231 per share median forecast among strategists, but there may still be room for upside, Goldman Sachs strategists said.
“Strong U.S. economic growth, lower interest rates and a weaker dollar are likely to boost earnings per share expectations,” the strategists said.
Q4 2023 earnings week begins this week, and strategists expectS&P 500 IndexComponent performance “generally will exceed analysts’ expectations,” even though profit expectations for the companies last quarter have been higher than in recent quarters.
U.S. economic data has remained strong in recent months despite concerns that the Federal Reserve’s aggressive interest rate hikes to curb high inflation could tip the economy into recession.
As price pressures ease, U.S. Treasury Secretary Yellen announced on Friday (5th) that the U.S. economy has achieved a rare “soft landing.” Richmond Fed President Barkin also said that as the economy normalizes and confidence in the path of downward inflation increases, the Fed can begin to lower interest rates. Swaps traders are betting that the Federal Reserve will cut interest rates six times this year, with the first 25 basis point cut as early as March.
Kirsten upgraded his pair last monthS&P 500 Indexexpectations, the index’s target price for the end of 2024 was raised to 5100 points from 4700 points a month ago. He said at the time that profit forecasts might be too conservative given loose financial conditions.
He predicted at the end of 2022S&P 500 IndexIt would rise just a few percentage points to reach 4,000, making him one of the many strategists who failed to predict the index’s rise.last yearS&P 500 IndexIt surged 24% to 4769.83 points.
but,S&P 500 Index The first week of 2024 saw the first decline in 10 weeks, ending the longest consecutive weekly rise in nearly 20 years.
2024-01-08 12:38:54
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