Multinational investment bank Goldman Sachs has revised its earlier call for another large selloff in the United States stock market. The change in forecast comes following a strong rebound in stock prices from their March lows.
The bank adjusted its three-month forecast in a May 29 client note reported by Bloomberg. Goldman analysts, headed by chief U.S. equity strategist David Kostin, had previously predicted further selloffs that would take the S&P 500 down to the 2,400 level.
Goldman Sachs’s strategists now anticipate a maximum drop to the 2,750 level and acknowledge the potential for a further rally to 3,200. The US equity benchmark closed at 3,044 on Friday.
The recent client note reads:
“The powerful rebound means our previous three-month target of 2,400 is unlikely to be realised… Monetary and fiscal policy support limit likely downside to roughly 10%. Investor positioning has oscillated between neutral and low and is a possible 5% upside catalyst.”
A massive selloff in March, prompted by the tanking of oil prices amidst coronavirus-inspired economic uncertainty, had caused a sharp drop in US equity prices. The market has since recovered by around 36 percent.
Whilst Goldman is predicting less market carnage than once thought, JP Morgan Chase are starting to lean bearish. In a note dated May 28, Global Head of Macro Quantitative and Derivatives Strategy, Marko Kolanovic, highlighted tensions between the U.S. and China as limiting the market’s upside potential.
Despite the change in short-term forecast at Goldman, the multinational bank still maintains an end-of-year price target for the S&P 500 of 3,000.
Images courtesy of Shutterstock, TradingView and Twitter.
Disclaimer. Read MoreRead Less
As a leading organization in blockchain and fintech news, BeInCrypto always makes every effort to adhere to a strict set of editorial policies and practice the highest level of journalistic standards. That being said, we always encourage and urge readers to conduct their own research in relation to any claims made in this article. This article is intended as news or presented for informational purposes only. The topic of the article and information provided could potentially impact the value of a digital asset or cryptocurrency but is never intended to do so. Likewise, the content of the article and information provided within is not intended to, and does not, present sufficient information for the purposes of making a financial decision or investment. This article is explicitly not intended to be financial advice, is not financial advice, and should not be construed as financial advice. The content and information provided in this article were not prepared by a certified financial professional. All readers should always conduct their own due diligence with a certified financial professional before making any investment decisions. The author of this article may, at the time of its writing, hold any amount of Bitcoin, cryptocurrency, other digital currency, or financial instruments — including but not limited to any that appear in the contents of this article.
Source: https://beincrypto.com/goldman-sachs-revises-calls-for-renewed-us-stock-market-selloff/
