Let’s hope Goldman Sachs is wrong | Forexlive
S&P 500 futures are down 0.2% and we’re on a six-week winning streak. In that time, the index has gained 8.45% despite the election uncertainty.
If you read Friday’s Goldman Sachs note, then that is as good as it will get for a long time.
“We estimate the S&P 500 will deliver an annualized nominal total return of 3% during the next 10 years (7th percentile since 1930) and roughly 1% on a real basis.”
That’s scary and it’s a reminder that the US is trading at a rich P/E ratio.
Goldman Sachs’ equity strategy team, citing high concentration in the Mag7 and a lofty starting valuation.
“Our
historical analyses show that it is extremely difficult for any firm to
maintain high levels of sales growth and profit margins over sustained
periods of time.”
The current CAPE ratio is 38 times, which is in the 97th percentile, highlights Goldman.