Goldman Sachs Group Inc. strategist David Kostin said he sees downside risks to his target for U.S. stocks, adding to a chorus of Wall Street voices becoming more pessimistic.
Kostin wrote in a note today that "risks appear tilted to the downside" to his forecast of 5,100 index points by year end. At the same time, Morgan Stanley strategist Michael Wilson – well known for his more pessimistic views on the market — today doubled down on a prediction for a further pullback.
Last week's wild swings were "classic bear market action," Wilson wrote in a note. "We remain sellers of rallies and of the view that S&P 500 fair value remains closer to 4,000 tactically," he said.
While a drop to 4,000 — implying about 10% downside from Friday's close — is not a central scenario for Goldman's Kostin, he wrote in a note on Monday that a move to that level is possible if real U.S. treasury yields rise by 60 basis points to 0%.
The main U.S. equity benchmark rallied on Friday, closing with a weekly gain for the first time this year, after a rollercoaster of sharp intraday swings.
