Goldman Sachs sees S&P 500 hitting 6,000 by year's end
Monday begins the final week of the year's first fiscal quarter, with Oppenheimer raising its year-end target for the S&P 500 (^GSPC) from 5,200 to 5,500. In addition, Goldman Sachs has laid out a scenario in which the S&P 500 could hit 6,000, led by mega-caps that have outperformed expectations.
Yahoo Finance Markets Reporter Josh Schafer joins the Live show to break down the bullish calls from the financial firms and show how markets could perform moving forward.
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Editor's note: This article was written by Nicholas Jacobino
Video Transcript
- We'll keeping it moving here this morning on "Morning Brief." Stock futures, they're edging lower. You've seen it in the corner of your screen here. This morning ahead of a shortened trading week. And the end of the quarter. My goodness, it's flown.
Despite the tick to the downside, markets are on track for five consecutive months of gains. And analysts from Oppenheimer see a more bullish path ahead for stocks this year. Here with more, we've got Yahoo Finance's Josh Schafer to break it down. Hey, Josh. So what are they saying?
JOSH SCHAFER: Brad, it is the final week of the quarter, and we hit everyone's S&P 500 target for 2024.
- Already?
JOSH SCHAFER: Congrats. Yes. The year is over.
- Done.
JOSH SCHAFER: No that means they have to come out and just move it higher, right? And that's what we're starting to see street wide here. So Oppenheimer had been the highest call entering the year, one of the highest calls, tied with the highest call of 5,200.
Now, John Stoltzfus coming out this morning and saying, well, now that we've reached that target, we simply think stocks go higher from here. Key to this call, a couple of things to highlight here, guys. He thinks that we're going to keep seeing a broadening out in the market, and this is going to be a broadening driven chug higher here, not necessarily a tech bubble style rally.
And you could see both those calls out there right now as far as the S&P 500. There are people sort of calling for both ways that we could get to see stocks higher here. But the other thing he pointed out that I thought was interesting is simply, it's less about the economy surprising him to the upside because he's been in a positive economy camp as a lot of stock market bulls have been this year. But he talked about a capitulation among the bears.
A sanctuary maybe just the floors moving up, and the floor keeps moving up, right. And at some point, people want to join the party. Well, at this point, when you look at performance to the year where are you going to join the party, probably in the broadening out, right. You're not going to hop into some of these areas that have already taken off. And I think that was one of the bigger takeaways here.
- It is certainly definitely worth noting. And also similar just in terms of the narrative that has shifted since the start of the year, a number of the strategists that we've talked to time and time again here over the last several weeks at least have been talking about the broadening out story and exactly what that is going to do here to some of these year end targets. So that was the latest here from Stoltzfus over at Oppenheimer.
But then also Goldman was out with an interesting note. And it's pretty much pointing to a similar type of scenario, just about the fact that so many of their clients are asking, OK, so what's happening now? What are the scenarios around your base case? And they had one scenario that was what, we could see the S&P up to 6,000 on the flip side. We could see the S&P pressure down to just around 4,500.
JOSH SCHAFER: Right. Yeah. It was interesting. Goldman highlighting the question of the moment right now, I think, for a lot of these firms, which is they said one of the most popular questions they're getting right now is, what are the possibilities around your baseline forecast? 5,200 is a very popular number right now on Wall Street for the S&P 500.
And we're sitting at it. And we have a lot of time left this year. So interestingly enough, we were just talking about that broadening out, right. So broadening out, we're talking about things like financials continuing to perform well. Maybe the Russell 2000 joins the party.
If that happens, Goldman said maybe we get to 5,800. What you're looking at on your screen now, though, is sort of the bubble call. So you're looking at market implied long term S&P 500 growth expectations. If we Zoom in on that chart, you can see right now, we're at a 11%. Look at the tech bubble at 16%.
You see that run higher. The post COVID bubble, which is 2021. We got even more extended and growth expectations. Goldman says, if we get into an area like that, where we have continued mega-cap growth exceptionalism, we're being led by these big tech stocks and people are going to pile into that trade, we could get to 6,000 this year.
That's 15% up from where we are now. We should also note, and we'll be digging into this more this week, it's not just Goldman that sees this happening. This is something that Capital Economics has highlighted to us in the past. They think that we could reach 6,500 if we were in a momentum trade.
So if we're in a momentum trade, momentum can feed on itself and grow a little bit higher. It'll be interesting to see if that is what we're talking about in six months or if we start to maybe get some sort of pullback or something to slow us down here. It feels like we're just charging ahead.
- Yeah. You got to think that scenario at least isn't too likely. But hey, maybe I'd be the one who as we have in the last laugh. I don't know. It's just hard to think that we're going to have this massive March forward just this very, very concentrated group of stocks who are leading the way. They're saying that 6,000 there could potentially be attainable. I don't know. I mean--
JOSH SCHAFER: They highlighted scenarios where we follow, the 45-- two different scenarios where we follow the 4,500 to you. Important to note that. There's still downside risk out there.
- Hence why they're right there in the middle, those two scenarios.
- Risk is everywhere.
JOSH SCHAFER: Right.
- Josh, thanks so much for helping us break this down. And this one coming ahead of the opening.
