S&P 500 Index: Looks north amid upbeat US economic outlook, vaccine hopes – Goldman Sachs
|Analysts at Goldman Sachs published a detailed report on the global market outlook, especially about the US growth views and its implications for the S&P 500 index.
Key quotes
“US growth views have become a key driver of market outcomes.
Our forecasts imply that there is still room for market pricing of US growth views to move higher, particularly given improving prospects for an early vaccine.
We show that as long as improving growth is in the driver's seat, this would likely be consistent with further equity upside even if recent real yield declines were to reverse.
Our own US growth forecasts, which were upgraded earlier this week, now incorporate a vaccine approval by the end of 2020, and widespread distribution by the end of 2021Q2 as the central case.
A rise in our growth factor is -all else equal- associated with higher equity returns (a 25 basis point upward shift in growth expectations over the next two years is associated with a 4.5-4.9% lift to the S&P 500), as are lower real yields (a 25 basis point rise in real yields is associated with a 1.2-1.4% drag on equities).”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.