While low equity interest rates have boosted equity validations this year, pushing the S&P 500 to record highs, the government policy uncertainty and poor earnings outlook will likely keep stocks from rallying any further this year, according to Goldman Sachs.
Key quotes (Source: CNBC)
“Although our rates strategists forecast the 10-year US Treasury yield will fall to 1.75% by yer-end, we expect the lingering policy uncertainty and negative revisions to 202 EPS will limit equity upside.”
“Combining the tailwind to valuations from falling interest rates and the headwinds from weak growth and high uncertainty, a macro model indicates that the S&P 500 currently trades near fair value.”
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