The stock market has peaked and will trade flat for the rest of 2024, Goldman equity chief says

• The S&P 500 could trade flat for the rest of the year, says David Kostin, chief U.S. equity strategist at Goldman Sachs.

• He told Bloomberg TV that the index has already reached Goldman's end-of-year target of 5,200 points.

• The company's indicators do not point to a further rise from current levels, although interest rate cuts may change that.

The stock market rally has run its course for 2024, as… Standard & Poor's 500 The price now stands above Goldman Sachs' year-end forecast, said David Kostin, the company's chief US equity strategist.

In an interview with Bloomberg TVHe said there is no economic, valuation or earnings case for further upside, and noted that money flow models also show that further gains are to be seen. The S&P 500 surpassed Goldman's year-end target of 5,200 earlier this month.

This roughly suggests a “fixed return from now until the end of the year,” Kostin said, leaving open the possibility of changing forecasts if variables change.

As of now, Costain's team expects real GDP growth of just under 3% and earnings growth of about 8%. Meanwhile, the valuation is currently high, and is unlikely to boost the stock further.

“At the index level, they are trailing earnings by about 21 times,” Kostin said. “So the potential for multiple expansion, while possible, is less likely.” “The idea that profits will be much greater than we think we think is very low.”

However, the Goldman stock boss isn't completely giving up on the possibility of an upward turn. Although this is not Goldman's base case, more upside could come if the Fed is forced to cut interest rates further than expected, he said.

But for now, Goldman still considers two cuts to be the most likely scenario for this year. Markets maintained similar expectations, with expectations little changed due to Wednesday's CPI being colder than expected.

“The base case is actually that the market will trade around that level of multiple or in fact, even a lower multiple as we get closer to the end of the year,” Kostin reiterated.

Others are a bit more optimistic that the S&P could deviate from its steady path this year. UBS, which also holds a target of 5,200 as its base forecast, recently noted that A 5500 can be achieved instead of. That is if the economy continues to contract, and AI spending momentum continues.

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