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

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

(Reuters) – Goldman Sachs cut its year-end 2022 target for the benchmark by about 16% to 3,600 points, as the US Federal Reserve shows few signs of backing away from its aggressive rate hike stance.

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

The benchmark index closed last time at 3758 points.

“Based on our clients’ discussions, the majority of equity investors have taken the view that a difficult downside scenario is inevitable and their focus is on the timing, size, and duration of a potential downturn and the investment strategies for these forecasts,” Goldman analyst David wrote. Costin.

The Fed signaled on Wednesday that global policymakers will “continue” their fight to beat inflation, raised US interest rates by 75 basis points for the third time in a row and indicated that borrowing costs will continue to rise this year.

Kostin noted that inflation has proven steadier than expected and is unlikely to show clear signs of abating in the near term, leading to higher estimates of Fed tightening.

US monthly consumer prices rose unexpectedly in August.

“Most portfolio managers believe that in order to control inflation, the Fed will have to raise rates high enough that it triggers a recession in the US at some point during 2023,” he added.

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

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