>September 22, 2022 at 11:42 PM EDTUpdated onSeptember 23, 2022 at 6:40 AM EDT
>S&P 500 Index year-end target cut to 3,600, implying 4.2% drop
>Risks skewed to downside even after forecast revision: Kostin
>to 3,600 from 4,300, arguing that a dramatic shift in the outlook for interest rates moving higher will weigh on valuations for US equities (lol 700 point forecast cut)
>the higher interest-rate scenario in Goldman’s valuation model supports a price-earnings multiple of 15 times, compared with 18 times previously (currently S&P500 P/E is ~19)
>Goldman is cutting its target as several strategists surveyed by Bloomberg have reduced their year-end estimates for the S&P 500, even as they still on average see 16% upside from current levels through the end of this year. Analysts have also slashed price targets for US stocks but still predict nearly 26% returns for the benchmark over the next 12 months. (???? either delusional analysts that don't want to revise their calls lower, or we're about to see a monster rally into the end of the year)
>A majority of equity investors have adopted the view that a hard landing scenario is inevitable and their focus is on the timing, magnitude, and duration of a potential recession, Kostin and his colleagues wrote. Under such a framework, the 3-, 6-, and 12-month S&P 500 targets work out to 3,400, 3,150, and 3,750 respectively, they said.
>3 month target = 3400 ----- 6 month target = 3150 ----- 12 month target 3,750 (??!?!?!?!?!)
>They also say a year-end rally in the US equity gauge to 4,300 is possible if inflation shows clear signs of easing.
we're about to get PCE in 18 minutes
if core PCE is bad, we are going to dump so hard
but if core PCE comes out good, we must just get a little relief