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Goldman Sachs cuts 2022 target for S&P 500 by 16%

Economy Sep 23, 2022 06:00AM ET
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© Reuters. People wearing masks, following the coronavirus disease (COVID-19) outbreak, are seen near an electronic board showing Dow Jones and S&P 500 stock indexes, at the Lujiazui financial district in Shanghai, China November 9, 2020. REUTERS/Aly Song/File Photo
 
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(Reuters) -Goldman Sachs has cut its year-end 2022 target for the benchmark S&P 500 index by about 16% to 3,600 points, as the U.S. Federal Reserve shows little signs of stepping back from its aggressive rate-hike stance.

Analysts at Goldman Sachs (NYSE:GS) wrote in a note late Thursday that the expected path of interest rates by the central bank is now higher than its previous estimate. Their previous target was 4,300 points.

The benchmark index last closed at 3,758 points.

"Based on our client discussions, 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 and investment strategies for that outlook," wrote Goldman analyst David Kostin.

The Fed indicated on Wednesday global policymakers would "keep at" their battle to beat down inflation, and hiked U.S. interest rates by 75 basis points for a third consecutive time and signaled borrowing costs would keep rising this year.

Kostin noted inflation has proved more persistent than expected and is unlikely to show clear signs of easing in the near term, leading to even higher estimates of Fed tightening.

Monthly U.S consumer prices had unexpectedly risen in August.

"Most portfolio managers believe that in order to corral inflation the Fed will have to hike rates sufficiently high that it will result in a U.S. recession at some point during 2023," he added.

Earlier this month, UBS cut its 2022 year-end target for the S&P 500 to 4,000 points.

Goldman Sachs cuts 2022 target for S&P 500 by 16%
 

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Comments (7)
John Nemeth
John Nemeth Sep 23, 2022 8:22AM ET
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I hope George Soros is running out of money. Look no further than what a successful man Hunter Biden is and you know America has the best leadership possible with Brandon and Kamala in charge.
James Long
FauxNews Sep 23, 2022 8:22AM ET
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You watch too much Sean, Laura and Tucker.
John Nemeth
John Nemeth Sep 23, 2022 8:22AM ET
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James Long Thanks George.
Brad Albright
Brad Albright Sep 23, 2022 8:22AM ET
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That passes for reasoning in your mind? You should have stayed in school.
Onder OZTUNALI
Onder OZTUNALI Sep 23, 2022 8:22AM ET
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Actually he is right. US is dealing all the cards he knew before hand. It is his game to play for now. The whole world will hurt to ensure the longevity of its global leadership, which at some point could be left to China. but for now big boss USA
Joe Rizzuto
Joe Rizzuto Sep 23, 2022 7:08AM ET
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seriously? lol. and they are the smartest people in the room. even smarter then biden-harris.
John Lakran
John Lakran Sep 23, 2022 7:00AM ET
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Didnt we already have two quarters of neg growth? Typical Fed overshooting and not looking around. I predict smaller to flat hikes into year end.
lionel laurent
lionel laurent Sep 23, 2022 6:43AM ET
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assassins economique goldman sachs
Chuck Anderson
Chuck Anderson Sep 23, 2022 6:13AM ET
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bait and switch  ...lol. so typical Goldman
Luis Zavala
Luis Zavala Sep 23, 2022 6:03AM ET
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Easy to drop your PT when markets are down big lol
Iyarin Boonnum
Iyarin Boonnum Sep 23, 2022 6:01AM ET
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Type the wrong Big Figure? 2,600 points is the right figure i guess!!!
 
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