GS says at "maximum optimism"

CNBC
By Jeff Cox
Feb. 21,2017

Goldman Sachs: Investors are at 'maximum optimism' and have a letdown coming

See full article at the following link
http://cnb.cx/2lnVpd1

Extracts from the above mentioned article
Goldman Sachs strategists aren't buying into all the optimism surrounding the stock market in 2017.

In fact, they believe investors are reaching "the point of maximum optimism" that will lead later in the year to a pullback.
Despite a rally that has sent the S&P 500 up a gaudy 5 percent in just the first seven weeks or so of trading, Goldman is sticking to its fairly pessimistic call for the full year. The firm believes the large-cap index will gain about another 2 percent before hitting a wall and fall 4 percent from there to finish 2017 at 2,300, or about 2 percent below its current level.
"Financial market reconciliation lies ahead," said David Kostin, Goldman's chief U.S. equity strategist. "We are approaching the point of maximum optimism and the S&P 500 will give back recent gains as investors embrace the reality that tax reform is likely to provide a smaller, later tail wind to corporate earnings than originally expected."



Bloomberg
By Julie Verhage
Feb. 21,2017

Goldman Warns U.S. Stocks are Now Reaching Peak Optimism

See full article at the following link
http://bloom.bg/2l4tig7

Extracts from the above mentioned article

• Index is up more than 20 percent over the past 12 months
• Roughly half of the gain came after November elections

Peak optimism is fast approaching.
Goldman Sachs Group Inc. says the surge in confidence following Donald Trump’s November victory is reaching an inflection point. Investors counting on tax cuts and an economic boom to fuel a surge in corporate profits are getting ahead of themselves, according to the bank.
“Financial market reconciliation lies ahead,” David Kostin, Goldman’s chief U.S. equity strategist, wrote in a note. The “S&P 500 Index will give back recent gains as investors embrace the reality that tax reform is likely to provide a smaller, later tailwind to corporate earnings than originally expected.”
Kostin and his team pointed out that while corporate earnings estimates for 2017 have fallen by 1 percent since the election, the S&P has surged 10 percent. Something has to give, they say.
The average year-end price target for the S&P 500 on Wall Street is 2,364, according to data compiled by Bloomberg. That’s right where the index is trading today.

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