Goldman Sachs said stocks appear ready to adjust as the new trading year begins. Peter Oppenheimer, chief global equity strategist at Goldman Sachs, said that after an unusually strong two-year surge, stocks are likely to go through a short-term digestion period before rising further. He noted that the two-year performance from 2023 to 2024 ranked in the 93rd percentile over the past 100 years, highlighting how far the market has evolved. “The strong share price gains in recent months have left the stock ‘priced to perfection,'” Oppenheimer wrote in a letter to clients. “While we expect stocks to make further progress overall this year — driven primarily by earnings – but they are increasingly vulnerable to corrections driven by further increases in bond yields and/or disappointing economic data or earnings growth .SPX .SPX 1Y mountain last year S&P 500 index Oppenheimer said given the Fed is in A rate-cutting cycle without the economy in recession has generally been the favored backdrop for stocks, however, in addition to the market’s recent gains, high valuations and unusually high market concentration also provide Oppenheimer with pause. Reason. In other words, “While we remain optimistic about the stock market overall, the risk of near-term disappointment is rising,” Oppenheimer told clients. In this environment, he said, focus on diversification to improve risk-adjusted returns. Oppenheimer said downside protection remains attractive given the current relatively low volatility. Some of Oppenheimer’s assumptions may have come true. The S&P 500 fell more than 1% on Friday, sending the index into negative territory for 2025. The survey predicts that the S&P 500 will end the year at 6,643 points, 12.2% higher than Wednesday’s closing price.
