With global markets gathered in the hope that a massive economic stimulus will accompany the new administration of President-elect Joe Biden, Goldman Sachs ’projection that the S&P 500 will end in 2021 at 4,300 points looks even more realistic.
In ours call of the day, the U.S. investment bank’s chief equity strategist, David J. Kostin, has charted the path to 4,300.
Goldman sees the S&P 500 SPX,
increasing by 14% year-on-year, after one of the most watched indices in the world closed at 3,756 by the end of 2020. It is expected to grow 7% more than the index by 2022, reaching 4,600.
The US bank’s upward forecast on the US economy is based on a double-digit yield forecast for 2021: real gross domestic product growth of 6.4% compared to the 4.2% consensus .
To the economic increase in shares is added a massive increase in earnings per share (EPS), a rise in the terrible impact that the COVID-19 pandemic has had on corporate results. Goldman expects EPS to rise 31% in 2021 after falling 17% in 2020.
In parallel with the EPS, there are projections of a sharp rebound in margins, which Goldman expects to be higher than the upward consensus forecast. An increase in margins is mainly due to operational leverage as well as cost moderation such as labor.
Leverage stocks with high operations surpassed 2020 and Goldman expects this trend to continue during this year thanks to strong economic growth.
In many ways, the 18% concentration of the S&P 500 in 2020 was aided by its five most important actions: technology giants Facebook FB,
Amazon AMZN,
Apple AAPL,
Microsoft MSFT,
and GOOGL Alphabet,
These shares returned 56% compared to a growth of 11% of the remaining 495 companies.
However, Goldman warns that investors are complacent about antitrust risks.
Although China’s antitrust actions wiped out the performance of Chinese technology stocks in just eight weeks, the market has largely not reacted to the Justice Department’s lawsuit against Google and the Federal Commission’s lawsuit against Trade against Facebook.
Closing the roadmap to 4,300 is the industry weighting recommended by Goldman Sachs. The investment bank has information technology, healthcare, industrial and materials classified as overweight, while communication services, consumer commodities, utilities and real estate carry little weight.
The buzz
A day after Donald Trump became the first president to be indicted twice, Biden will propose a $ 2 trillion increase in tax spending to help the U.S. economy weather the COVID-19 pandemic, according to a report from CNN.
Alibaba 9988,
and Tencent 700,
shares rose in Hong Kong and Baidu rose to the Nasdaq premarket, after reporting that, after all, U.S. investors will not be banned from investing in Chinese Internet giants.
It’s a big day for data, with initial and ongoing claims for unemployment. About 800,000 initial unemployment claims are expected to be reported, up from 787,000 last week. But it is likely that Federal Reserve Chairman Jerome Powell’s speech on economics about 12:30 p.m. will be the star of the economic fair.
The National Highway Traffic Safety Administration has asked Tesla TSLA, an electric vehicle manufacturer,
to voluntarily withdraw 158,000 Model S and Model X vehicles, after provisionally concluding that a possible defect in the vehicle display screen could affect safety.
Also read: He started buying Tesla at just $ 7.50 and is now retiring at age 39 with a value of $ 12 million; it still refuses to sell a single share.
Are you running out of cryptography? According to Cointelegraph, the eToro exchange platform is struggling to keep up with “unprecedented demand,” warning that cryptocurrency traders have limited liquidity which means there may be limitations on purchase orders.
Month: Bitcoin and its “fun business” should be regulated worldwide, says the head of the European Central Bank
SPCE from the space flight company Virgin Galactic,
shares are up nearly 12% in the New York premarket, after ARK Investment Management filed with the Securities and Exchange Commission to launch a publicly traded fund for space exploration.
The markets
It seems like a positive day ahead. YM00 futures,
ES00,
NQ00,
they are aiming higher, ready for a strong open with the Dow aiming for more than 100 points. Asian markets NIK,
HSI,
SHCOMP,
were concentrated in a general way while the European indices SXXP,
UKX,
DAX,
PX1,
they are constantly in the green.
Market optimism comes as investors look at a possible two-trillion-dollar stimulus proposal from Biden. Sentiment is also bolstered by the rare escalation of tensions between the US and China, as it looks like US investors will not be able to invest in some Chinese internet giants.
The graph
U.S. Treasuries focus on our Marshall Gittler Day chart on BDSwiss.
10-year Treasury note yields TMUBMUSD10Y,
it initially fell on Wednesday, driven by strong demand for 30-year bonds at a $ 24 billion auction. But the fall was reversed late the day after the report on Biden’s stimulus plans.
Random readings
Wanted: Bisoners from the UK, no previous experience expected.
The mayor of a Houston suburb was chosen by taking a name from a hat.
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