Goldman Sachs is more or less optimistic on US stocks as we head into 2016.
The bank’s strategists summarized the bank’s forecasts for major global markets and US economic data on Friday in a weekly note to clients.
According to chief equity strategist David Kostin, the S&P will hover around 2,025 in the next three months, and will close next year up 5% at 2,100. On Friday, the index closed at 2,005
“Investors should focus on key bifurcations in the market,” Kostin recommended. “Firms with strong (vs. weak) balance sheets and firms with high domestic (vs. foreign) sales should outperform. We also highlight stocks with expanding margins, given that overall margins have been flat for the past five years. Examples include Alphabet (GOOGL), Amgen (AMGN), Bristol-Meyers (BMY), Starbucks (SBUX), and Visa (V).”.
He also added that Goldman Sachs forecasts that the fed funds rate will end 2015 at 1.4%.
See below for a complete summary of Goldman’s outlook for world markets and the economy.