S&P 500 bull market will soon end: Goldman Sachs

[March 11, 2020]  LONDON (Reuters) - Goldman Sachs said on Wednesday the S&P 500 bull market, the longest on record, is likely to end soon, forecasting a 28% slump from its February peak as the fast-spreading coronavirus is seen taking a toll on corporate profits.

 A sign is displayed in the reception of the Sydney offices of Goldman Sachs in Australia, May 18, 2016. REUTERS/David Gray/File Photo

The bank expects the S&P 500 to hit 2,450 points, down 15% from current levels, by mid-year, followed by a bounce back in the fourth quarter to 3,200 points.

The bank also expects the benchmark index's <.SPX> earnings per share to decline 5% year-on-year, dragged by double digit drops during the second and third quarters.

"Drivers of our reduced EPS estimate include lower crude oil prices and interest rates that diminish Energy and Financial company profits," Goldman Sachs wrote in a note to clients.

"Domestic business activity outside of those sectors is also likely to be weaker than we originally forecast, as underscored by reduced or withdrawn guidance from a number of firms in recent weeks," it added.

(Reporting by Thyagaraju Adinarayan; Editing by Ritvik Carvalho)

[© 2020 Thomson Reuters. All rights reserved.]

Copyright 2020 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.  Thompson Reuters is solely responsible for this content.