Goldman sees earnings growth lifting S&P 500 by year-end
Nasdaq rises ~0.5%; S&P 500, Dow edge up
Tech leads S&P 500 sector gainers; Materials weakest group
Dollar, gold up slightly; crude, bitcoin both up >2%
U.S. 10-Year Treasury yield jumps to ~4.49%
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GOLDMAN SEES EARNINGS GROWTH LIFTING S&P 500 BY YEAR-END
Goldman Sachs (GS) expects that while S&P 500 gains so far have been driven by EPS growth and P/E expansion, it says that looking ahead it sees valuations remaining roughly the same, but that earnings growth will lift the S&P 500 by about 2% to 5,600 by year-end, according to David Kostin, GS's chief U.S. equity strategist, and his team.
The S&P 500 .SPX is last around 5,470 on Monday, and it is up 14.7% for the year so far.
The team expects 9% year-over-year EPS growth for the second quarter for S&P 500 companies. It also sees mega-cap AI firms - which have been driving much of the growth in earnings - posting sales growth of 17% year-over-year in the second quarter.
GS also sees S&P 500 firms clearing the low bar set up by consensus estimates and delivering stronger-than-expected results.
At the same time, the outperformance "reward" for stocks beating earnings expectations will be smaller than average again this quarter, the team wrote.
The second-quarter earnings season unofficially kicks off in mid-July.
(Caroline Valetkevitch)
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