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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.”