A continued surge in corporate earnings will have only limited benefit for stock prices, which face multiple policy obstacles, according to Goldman Sachs.
In fact, the bank’s strategists have raised their S&P 500 profits expectations through 2020, but do not expect the improved climate to have a meaningful impact on equity returns.
“The US economy is growing, corporate profits are rising, and stock prices should
continue to climb through 2019,” David J. Kostin, Goldman’s chief U.S. equity strategist, said in a note to clients. “However, the appreciation potential will be constrained by tightening monetary policy, a flattening yield curve, rising trade tensions, and the upcoming mid-term Congressional elections.”
Goldman now estimates full-year earnings in 2018 to come in at $159 per share, a boost from the $150 original forecast. That implies a 19 percent increase from 2017, slightly below the 19.8 percent forecast from the FactSet consensus.
via CNBC 
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.