2023-09-11 16:37:00
Analysts at Goldman Sachs believe that uncertainty in the US economic picture could weigh on US stocks until the end of 2023, and investors should now focus on stocks of companies that return money to shareholders in the form of dividends or buybacks. writes CNBC.
The release of data on economic growth and inflation could affect the trajectory of stocks in the next few months, warned Goldman Sachs equity strategist David Kostin. He expects a slowdown in US GDP growth, driven in part by resumption student loan payments and the impact of higher mortgage rates on the housing market. Goldman Sachs forecasts that real GDP growth will decline from 3.1% in the third quarter to 1.3% in the fourth quarter of 2023.
US inflation may accelerate again after months of slowdown. In particular, the investment bank expects that the core consumer price index (Core CPI), which excludes volatile food and energy prices, may begin to rise again. In particular, the figure could rise from 0.2% month-on-month in July to 0.4% in January 2024.
Slowing US GDP growth and accelerating inflation may temporarily reduce investor confidence in a soft landing of the economy, that is, a slowdown in inflation without significant consequences for the labor market and other areas. This will negatively affect risk appetite and stock prices, Kostin believes.
The investment bank recommends that investors pay attention to shares of companies that have dividend and buyback programs, rather than companies that use cash for capital expenditures and research and development.
Despite the predicted volatility in economic data, Goldman Sachs believes that the likelihood of a recession in the United States is very low. The company cut its estimate of the chances of a recession to 15%, saying the US Federal Reserve will not raise interest rates in September and may stop raising rates altogether. The Fed’s next rate meeting will take place on September 20.
Goldman Sachs expects the S&P 500 to end the year at 4,500. This is only 1% higher than the closing price of Friday, September 8, at 4457.49 points. Goldman Sachs analysts’ target is well above the year-end average of 4,372 among Wall Street’s top 15 strategists, according to the CNBC Market Strategist Survey.
Earlier, Morgan Stanley warned that downside risks to the American stock market could persist throughout the fall and possibly into the winter. The bank’s experts predict that the S&P500 index will end the current year near the level of 3,900 points. UBS experts also expect the index to drop to this level by the end of the year. The most optimistic forecast for the American stock market was given by Oppenheimer analysts – they expect the S&P 500 index to grow to 4900 points.
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