The S&P 500 index could hit 6500 by the end of next year, according to Goldman Sachs (GS) and Morgan Stanley (MS), boosted by the U.S. economy’s growth and higher corporate earnings.
That would represent a gain of about 10% from the index’s closing level Monday of 5,893.62. The S&P 500 recently traded around 5,905, up about 0.2% Tuesday.
Goldman Sachs chief equity strategist David Kostin wrote that the Wall Street firm’s forecast reflects a “12% total return with dividends” by the end of next year, “predicated on continued U.S. economic expansion, earnings growth of 11% in 2025.” The index has been on a tear this year.
The Magnificent Seven stocks will continue to gain, Goldman said, but their margin of outperformance versus the other 493 stocks in the index will be smaller. Goldman also recommended buying mergers and acquisitions (M&A)candidates under a Donald Trump administration expected to ease regulation, …