The financial giant Goldman Sachs thinks the S&P 500 has more room to run. A team of analysts led by David Kostin, Goldman’s chief US equity strategist, predicts the S&P 500 will witness returns of 2% in three months, 5% over six months and 8% in the next 12 months, implying index levels of 6,800, […] The post Goldman Sachs Abruptly Raises S&P 500 Price Target, Cites Accommodative Fed Policies appeared first on The Daily Hodl.The financial giant Goldman Sachs thinks the S&P 500 has more room to run. A team of analysts led by David Kostin, Goldman’s chief US equity strategist, predicts the S&P 500 will witness returns of 2% in three months, 5% over six months and 8% in the next 12 months, implying index levels of 6,800, […] The post Goldman Sachs Abruptly Raises S&P 500 Price Target, Cites Accommodative Fed Policies appeared first on The Daily Hodl.

Goldman Sachs Abruptly Raises S&P 500 Price Target, Cites Accommodative Fed Policies

The financial giant Goldman Sachs thinks the S&P 500 has more room to run.

A team of analysts led by David Kostin, Goldman’s chief US equity strategist, predicts the S&P 500 will witness returns of 2% in three months, 5% over six months and 8% in the next 12 months, implying index levels of 6,800, 7,000, and 7,200.

The leading equity index is trading at 6,648.46 at time of writing. 

Kostin notes on LinkedIn that their forecast follows historical patterns during rate cut cycles.

“During the past 40 years, the S&P 500 has generated a 15% median 12-month return when the Fed resumed cutting rates against a backdrop of continued economic growth.”

The Federal Open Market Committee (FOMC) cut the federal funds rate by 25 basis points last week, and traders believe it’s likely the Federal Reserve will cut rates again at each of its final two FOMC meetings of the year.

Kostin also notes that earnings have driven the majority of the S&P 500’s 13% gains year-to-date.

“With our baseline economic and Fed forecasts largely reflected in market pricing, we expect earnings will continue to be the primary driver of equity prices from here. However, light investor positioning adds to the tactical upside case for stocks if the macro backdrop remains friendly. Despite the S&P 500 at a record high, our Sentiment Indicator of equity investor positioning stands at -0.3.”

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