Source: Bloomberg
Author: Alexandra Semenova, Isabelle Lee
The two largest banks in Wall Street are very different in their views on US stocks in the next decade.
When the S & P 500 Index hovers near the record high, Goldman Sachs strategist warns that the total return rate of its annualized name in the next few years will only be slightly higher than 3%.Steering other assets, including bonds, seek better returns.
Analyst analysts of JP Morgan Assets and Fortune Management Give a more optimistic outlook.They expect that large-cap stocks in the United States, that is, the stocks that have promoted most recent ups and downs, will still be an important part of investor asset portfolio. The annualized return rate of 6.7%in the next 10-15 years will be 6.7%.
Although this wave of rise has caused the stock price to be a bit difficult to prove its rationality compared to profit, and the bank's strategist also said that the valuation will eventually be reduced, but they expect that the steady fundamentals will make up for this.
"We want to ensure that people really understand that we are currently assumed that the price -earnings ratio shrinks," Morgan Chase wealth management multi -assets and investment portfolios, global supervisor Monica Issar said at a round table meeting on Monday, "The healthier macro and enterprises in the next 10 years will be healthier and enterprises in the next 10 years.The fundamentals will offset the shrinkage of P/E ratio. "
However, the bank's expectations for the S & P 500 Index are still lower than the long -term annualized yield of the long -term average of 11%from 1957 to the end of 2023.
The differences in prediction indicate that the extensive uncertainty shrouds Wall Street, even if the Fed finally turned to the loose monetary policy last month.To a certain extent, this is because of the tough economy, strong corporate profits, and guessing of the breakthroughs in artificial intelligence, which has promoted US stocks to rise sharply in the past two years, the S & P 500 has risen by 22%this year.The index has risen by more than 60%since its bottom 2022.
Goldman Sachs will not further comment.
According to a report on the capital market in 2025, Morgan Chase Assets and Fortune Management Department strategists expect US stocks to win cash and bring stable inflation adjustments.In contrast, Goldman Sachs believes that the return rate of the benchmark index will have a probability of about 72%behind U.S. Treasury bonds, and one -third of the probability of one -third before 2034 will lag behind inflation.
The optimistic part of the JP Morgan Chase team comes from expected artificial intelligence to bring returns, achieve higher income growth and increase profit margins, especially for large companies that invest in this technology field.
"I am very clear about the high valuation. Compared with their figures, I am more confident in our figures in the next ten years," said David Kelly, chief global strategist of Morgan Asset Management.He attributed the poor performance of the 10 years of the 2000s to the global financial crisis and acknowledged that there might have an unknown impact."But in general, we think that American companies are extremely extreme, they are sharp, and they are good at increasing profit margins."
