JPMorgan, at Odds With Goldman, Sees Solid Run Ahead for Stocks

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Strategists at two of Wall Street’s biggest banks have reached diverging conclusions about where the US stock market is heading in the years ahead.

Alexandra Semenova and Isabelle Lee, Bloomberg NewsStocks are enjoying a strong run as portfolio manager Keith Buchanan, explains how to take advantage of the bullish momentum.

With the S&P 500 Index hovering near record highs, strategists at Goldman Sachs Group Inc. are warning that stocks may deliver a paltry 3% annually in the coming years — restrained by an already-high starting point and elevated Treasury yields that could siphon money off into bonds and other types of assets.

While the rally has made prices a bit harder to justify when plotted against earnings — and the bank’s strategists say valuations will eventually need to go down — they anticipate that solid fundamentals will compensate for that. The diverging forecasts signal the broader uncertainty that’s hovering over Wall Street even after the Federal Reserve’s long-awaited pivot last month toward easing monetary policy. That’s in part because of how much stocks have already rallied the past two years thanks to the resilient economy, strong corporate profits and speculation about artificial intelligence breakthroughs — sending the S&P 500 to a 22% gain this year. It’s up more than 60% since bottoming out in October 2022.

 

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