Displaying items by tag: Goldman Sachs

(New York)

Goldman Sachs is making their position clear. The bank thinks that after all the volatility we have seen, the worst is behind us and stocks have already hit bottom. Goldman says that because of the Fed’s “do whatever it takes” attitude, it is unlikely the market will fall further. “The Fed and Congress have precluded the prospect of a complete economic collapse … These policy actions mean our previous near-term downside of 2,000 is no longer likely” for the S&P 500 Index, according to the bank’s strategists.


FINSUM: We are of two minds on this. On the one hand, Goldman makes a good point about the Fed propping up markets. On the other, there is a liquidity-induced real estate crisis brewing and the true ramifications of this downturn (including its expression in S&P 500 earnings) will not be felt for a few months.

Published in Eq: Total Market

(New York)

Goldman Sachs, who has been a leader in putting out new research n the economic effects of the current lockdown, has issued new guidance on this week’s pending jobless claims. The bank thinks jobless claims will increase to a whopping 6m this week. If that happens, it would mean this week’s figure would exceed the record that stood until last week by a whopping 9x. The coming release will cover the week from March 22-28th. “Jobless claims will be the timeliest hard data point for assessing the depth of the recession and catching the start of the recovery”, says Goldman.


FINSUM: The period the release covers is not even likely to be the worst. There is probably still a few weeks before the full scale of the layoffs becomes apparent and the numbers peak.

Published in Eq: Total Market
Wednesday, 01 April 2020 10:40

Goldman Sachs says GDP to Drop 34% in Q2

(New York)

Goldman Sachs issued a bleak revision of its earlier estimate for the looming second quarter recession. When the pandemic first struck, Goldman called for a 9% decline. It then proceeded to increase that forecast to 20% as the lockdowns began. Now it has reissued guidance, calling for a 34% decline in GDP and a rise in the unemployment rate to 15%.


FINSUM: This is a profound forecast and speaks to the scale of the pending downturn. The good thing, though, is that Goldman thinks there will be a 19% recovery in Q3.

Published in Eq: Total Market
Tuesday, 31 March 2020 10:05

Goldman Says the Market Has Not Bottomed

(New York)

In what comes as a very important announcement right now, Goldman Sachs argues that the stock market has not bottomed, and that it will take three things happening for the nadir to arrive. In order for markets to reach a bottom and start to sustainably rise, Goldman says case numbers must start to fall, there must be evidence that Fed and Congressional efforts are sufficient to support the economy, and investor sentiment and market positioning must bottom out (which has not even close to happened yet, according to GS). Goldman expects the S&P 500 to finish the year at 3,000.


FINSUM: We agree with the first two points (about case numbers and stimulus), but the third argument about positioning seems circular to us, as it relies on the markets getting worse before getting better.

Published in Eq: Total Market
Monday, 23 March 2020 16:07

Morgan Stanley Says 30% GDP Fall in Q2

(Washington)

The forecasts for growth have been reverberating through markets. When this whole crisis started, Goldman Sachs initially said there would be a 5% drop in GDP in the second quarter. Oh how delightful that sounds now. Things have escalated considerably since then. Here is a smattering of various Q2 GDP forecasts: Goldman Sachs at 24% decline, Morgan Stanley at 30%, and the St. Louis Fed at a whopping 50% decline.


FINSUM: We think it is safe to assume that the GDP decline in Q2 is going to massive. So much so that the actual figure matters much less than the pace at which the economy bounces back thereafter. Is it going to be a V-shaped recovery, or a U, or the dreaded “L-shaped” recovery?

Published in Eq: Total Market
Page 13 of 25

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