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Goldman Sachs cuts 2022 target for S&P 500 by 16%

People wearing masks after the coronavirus disease (COVID-19) outbreak near electronic boards displaying Dow Jones and S&P 500 stock indices in the Lujiazui financial district in Shanghai, China, November 9, 2020 REUTERS/Aly Song/File Photo

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SEPTEMBER 23 (Reuters) – Goldman Sachs has outperformed the S&P 500 (.SPX) index as the Federal Reserve shows little sign of backing off from aggressive rate hikes. The target for the end of 2022 was lowered by about 16% to 3,600 points. hiking stance.

Goldman Sachs analysts wrote in a note late Thursday that the expected interest rate path by the central bank is now higher than previous estimates. His previous goal was 4,300 points.

The benchmark index finally closed at 3,758 points.

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“Based on our conversations with clients, the majority of equity investors believe a hard landing scenario is inevitable, and the timing, magnitude, duration and prospects for a potential recession,” Goldman analyst David said. We adopt the view that we are focusing on investment strategies for Costin.

The Fed on Wednesday suggested global policymakers will “continue” the fight to contain inflation, raising U.S. interest rates by 75 basis points for the third time in a row, suggesting borrowing costs will continue to rise this year. I Read

Kostin noted that inflation has proven more persistent than expected and is unlikely to show clear signs of easing in the near term, making expectations for Fed tightening even higher.

Monthly US consumer prices rose unexpectedly in August.read more

“Most portfolio managers believe the Fed will need to raise interest rates high enough to lead to a US recession sometime in 2023 to keep inflation in check,” he added. rice field.

Earlier this month, UBS lowered its year-end 2022 target for the S&P 500 to 4,000 points.

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Reported by Aniruddha Ghosh, Bengaluru. Edited by Anil D’Silva and Krishna Chandra Eluri

Our standards: Thomson Reuters Trust Principles.

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