Goldman and Morgan Stanley sees strong S&P 500 gains in 2013

The two biggest U.S. equity bears in 2012 see the Standard & Poor’s 500 Index rising more than 12 percent this year to at least 1,600, as strong economic data point to higher corporate earnings.

Goldman Sachs Group Inc. (GS)’s chief U.S. equity strategist, David Kostin, raised his target today for the benchmark stocks gauge by 3.2 percent to 1,625 from 1,575. Adam Parker of Morgan Stanley (MS) boosted his 2013 estimate by 12 percent to 1,600 from 1,434. They join strategists at Deutsche Bank AG, Credit Suisse Group AG (CSGN) and Jefferies Group LLC in increasing their targets for U.S stocks in the last week.

“The 2013 U.S. equity market story is becoming one of improving business activity accompanied by increased CEO confidence,” Kostin wrote in a report. “Recent economic data has been strong as employment growth, ISM surveys and retail sales have all posted positive surprises. The ‘sequester’ has begun, and the federal government is still functioning.”

The rally in U.S. equities has pushed bearish strategists to capitulate in 2013 after being conservative last year, when stock seers forecast the smallest gain in seven years for the S&P 500. (SPX) Kostin and Parker estimated the S&P 500 would fall in 2012 to 1,250 and 1,167, respectively, making them the two most bearish strategists among the 14 surveyed by Bloomberg. The equity index surged 13 percent to 1,426.19 in 2012.

The S&P 500 closed within two points of its all-time record of 1,565.15 on March 14, as better-than-estimated retail sales and jobless claims data boosted optimism in the world’s largest economy. The data helped offset concerns over automatic federal spending cuts that started March 1.


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Mingze Wu

Mingze Wu

Currency Analyst at Market Pulse
Based in Singapore, Mingze Wu focuses on trading strategies and technical and fundamental analysis of major currency pairs. He has extensive trading experience across different asset classes and is well-versed in global market fundamentals. In addition to contributing articles to MarketPulseFX, Mingze centers on forex and macro-economic trends impacting the Asia Pacific region.
Mingze Wu