- Goldman Sachs' chief US equity strategist expects a soft landing with the US economy growing about 1% next year.
- But the S&P 500 will still end up about flat in 2023, David Kostin told Bloomberg TV on Tuesday.
The US economy will grow at roughly a 1% clip next year as it makes a soft landing, according to Goldman Sachs' chief US equity strategist.
But even in this relatively optimistic scenario, David Kostin told $4 the S&P 500 will decline roughly 10% before rebounding to end up at around 4,000, which is about where it is today.$4
"In that scenario you have no earnings growth. That's an optimistic scenario if you will, and you have stable kind of valuation," Kostin said.
In a hard landing scenario, he added, S&P 500 earnings would decline roughly 11%, equating to $200 per share next year, against Goldman's baseline of $224. The hard-landing scenario would also see the S&P 500 decline by 20%.
"Think about that as your downside, maybe 20% lower. Again that's a scenario, not a baseline, but a scenario as opposed to a market falling maybe 10% to 2,600 before ultimately rallying back to 4,000," he said.
Meanwhile, Deutsche Bank analysts published a note on Monday that $4 with the S&P 500 rallying to 4,500 in the first half of next year, then selling off by more than 25% in the third quarter, before rebounding back to 4,500 by the end of 2023.
Deutsche Bank also sees earnings per share among S&P 500 companies falling to $195 in 2023 from $222 in 2022.