Goldman Sachs raises S&P 500 target on Fed bet

Bloomberg

While corporate America’s profit engine is about to cool, Goldman Sachs Group Inc. says a Federal Reserve interest-rate cut will continue to boost stock prices this year.
The bank cut 2019 earnings estimates for the S&P 500 Index to $167 a share from $173, citing an economic slowdown, lower oil prices and weak margins, according to a note from strategists led by David Kostin. At the same time, the group raised its year-end price target by 100 points to 3,100, implying a 3 percent gain for the equity benchmark in the final five months of the year.
The S&P 500 surpassed Goldman’s prior year-end target earlier in July as investors grew confident the Fed will dial back interest rates in an effort to extend the longest economic recovery on record.
The move aligns Kostin with a growing Wall Street crowd predicting a slowdown in corporate profit that won’t dent the stock market. Since the start of May, 13 of 22 strategists tracked by Bloomberg have slashed profit estimates, wh-ile none have cut year-end price targets.
The S&P 500 has rallied 20 percent this year.