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With 48% of the S & P 500 index published, quarterly profits are up 22.5% over the same period last year, according to FactSet. However, some corporate executives have expressed concern over the way forward, particularly with regard to the impact of rates and rising interest rates on growth.
Kostin said some of these concerns are justified. For example, Goldman estimates that GDP will soon begin to cool and reach a growth rate of 1.6% by the fourth quarter of 2019.
"But not all assets suggest an imminent economic slowdown," he said, citing the railways. The credit spreads of companies have not widened enough to suggest a major slowdown.
Companies have been silent about buybacks, but this will resume soon. Goldman has forecast total redemptions of about $ 1 trillion this year, which should support the company's 2,850 price target for the S & P 500.
Kostin reiterated his recommendation that investors should remain loyal to high-quality companies: low levels of debt, stable sales and earnings growth, high return on equity and low risk of market contraction.
This group will generally outperform when the economy slows down in the final stages of the business cycle.
These names include Accenture, Alphabet, Mastercard and Ross Stores.
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