By Kim Khan
Goldman Sachs (NYSE:GS) is calling for an end to the bull market that’s been running for more than a decade.
David Kostin, Goldman Sachs Resarch’s chief U.S. Equities strategist, said Wednesday stocks will enter a bear market by the middle of this year.
“After 11 years, 13% annualized earnings growth and 16% annualized trough-to-peak appreciation, we believe the S&P 500 bull market will soon end,” Kostin wrote in a note. “The deterioration in fundamentals is visible.”
He predicts the S&P 500 will drop to 2,450 by mid-2020, which would be 28% down from its peak in February, constituting a bear market.
Earnings will be down 12% or more in each of the next two quarters as a dive in oil prices and disruption by Covid-19 continues to impact the economic landscape.
But Kostin isn’t pessimistic for long, saying that a new bull market will be “born later this year."
His end target for the S&P is 3,200. It was trading around 2,770 midday.
