Democrat blue wave to have modest impact on S&P 500 earnings – Goldman Sachs

Omkar Godbole FXStreet Contributor

Democrat's control of the presidency and both chambers of Congress – also referred to as a blue wave – would only have a moderate net impact on the medium-term path of S&P 500 earnings, according to analysts at Goldman Sachs.

Democrat's candidate Joe Biden is likely to reduce tariffs and deliver bigger fiscal spending following a victory in the Nov. 3 presidential elections. However, the positive impact of these moves will be negated by a higher corporate tax to some extent.

As such, the annualized S&P 500 earnings per share growth would be 13% through 2024, as per Goldman Sachs. "That's similar to our baseline forecast," the investment banking giant said.

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

EUR/USD looks weak below 1.1800

EUR/USD has slipped back under pressure, breaking through the 1.1800 support and drifting towards the weekly lows near 1.1770 ahead of the opening bell in Asia. The move reflects renewed strength in the US Dollar, with steady geopolitical tensions keeping its demand firm. Moving forward, the release of the German labour market report and flash inflation figures should keep European investors entertained on Friday.

GBP/USD threatens the 200-day SMA near 1.3440

GBP/USD rapidly leaves behind Wednesday’s strong advance, coming under heavy pressure and retesting the 1.3440 zone, where the critical 200-day SMA is located. Cable’s deep pullback follows the strong gains in the Greenback, while investors continue to pencil in a potential BoE rate cut in March.

Gold trims gains, slips back to around $5,170

Gold is now facing some downside pressure, hovering around the $5,170 region on Thursday. The yellow metal surrenders part of its earlier gains on the back of the resurgence of the buying interest in the Greenback. In the meantime, geopolitical tensions in the Middle East continue to limit the downside potential for now.