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The
bank's analysts cut their baseline earnings per share estimate
for S&P 500 index <.SPX> companies to $165 from $174 in 2020,
implying that profits will likely remain unchanged from a year
ago.
Analysts had forecast a 7.7% rise in earnings, according to
Refinitiv data.
Goldman Sachs said the latest forecast reflects a severe decline
in Chinese economic activity in the first quarter, lower demand
for U.S. exporters, supply chain disruptions and a slowdown in
domestic economic activity.
The virus, which is believed to have originated in a market
selling wildlife in the central Chinese city of Wuhan late last
year, has infected about 80,000 people and killed more than
2,700, the vast majority in China. In the past week, several
other countries also reported a spike in cases.
Goldman said it expects the S&P 500 to trade around 2,900 points
in the near-term, which is 14.4% below the index's record
closing high hit on Feb. 19, assuming the U.S. 10-year Treasury
yield <US10YT=RR> drops to 1%.
If the yield climbs to 1.5%, Goldman expects S&P 500 to hit
3,400 by the year-end.
Earlier in the day, Bank of America cut its world growth
forecast to the lowest level since the peak of the global
financial crisis in 2009.
(Reporting by Shreyashi Sanyal in Bengaluru; Editing by
Saumyadeb Chakrabarty)
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