Goldman Sachs raises S&P 500 year-end target to 5,600, citing strong earnings growth and AI enthusiasm.

From Investing.com: 2024-06-17 01:30:51

Goldman Sachs raises S&P 500 year-end target to 5,600 from 5,200. Five mega-cap U.S. tech stocks, including Microsoft and Amazon, have surged by 45% and now make up 25% of the index. Increased earnings estimates and investor enthusiasm for AI are driving the rally. Upside of 3.1% from last close.

The brokerage predicts unchanged real yields by year-end and strong earnings growth supporting a 15x P/E for the equal-weight S&P 500 Index. U.S. election is seen as a key risk factor between short-term and year-end forecasts. Index volatility tends to increase before elections but settles post-election to a higher level.

US presidential election in November this year is expected to impact S&P 500 volatility. Goldman Sachs notes historic trend of increased volatility before elections, with levels stabilizing and possibly rising post-election. The brokerage sees the election as a key determinant of the index’s performance in the short term.



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