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Goldman Sachs Group Inc. has raised its forecast for the S&P 500 Index, citing an optimistic earnings outlook driving Wall Street's bullish sentiment. According to a note to clients, the 12-month forward earnings expectations for the US stock index have reached a record high, signaling robust profit estimates after hitting a low point a year ago. They now predict the S&P 500 to reach 5,200 by the end of 2024, marking a 3.9% increase from Friday's close. This upward revision follows the previous forecast of 5,100 in mid-December, which was already raised from the initial projection of 4,700 made in November.
- The ongoing earnings season has reinforced bullish expectations, with approximately 79% of S&P 500 firms surpassing expectations so far. Notably, the Magnificent Seven, comprising tech giants like Meta, Amazon, and Microsoft, have shown a mixed performance, with some exceeding expectations while others fell short. Investors are eagerly awaiting Nvidia's earnings report later this week for further insight into the stock's ability to meet heightened expectations driven by the artificial intelligence boom.
Why it matters
Despite differing views on the market's trajectory, with some like Bank of America signaling potential upward revisions to year-end targets, others like Morgan Stanley maintain a more cautious outlook, projecting gains to broaden into less favored sectors.
