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Nothing slows the S&P 500: Goldman Sachs predicts a 14% advance in 2021


Wall Street is unstoppable. After ending 2020 with significant increases, it has started 2021 in the best of ways, setting new all-time highs. And it doesn't seem like anything is going to get in his way, nor is the political chaos affecting him. This is making more and more analysts who predict very optimistic forecasts.

The latest has been Goldman Sachs. The financial company predicts that the S&P 500 will advance 14% throughout the year. David J. Kostin, a strategist at the bank, predicts that it will close 2021 at around 4,300 points. It is currently trading at 3,800.

In 2020 the S&P 500's big endorsers were the top five stocks: Facebook, Amazon, Apple, Microsoft and Alphabet. Among the five they advanced on average 56% compared to 11% of the remaining 495 companies.

These values ​​have performed particularly well, especially when one takes into account the antitrust investigations that weigh on them. So far the market has not been very hard on them, as if it has happened in other markets, such as Asia, for example.

Alibaba has suffered very strong falls after China opened an investigation for "alleged monopolistic behavior", such as urging sellers to choose a single sales platform between two competitors.

But he's not just risking a prediction of the S&P 500. Kostin expects a surge in the coming months. massive increase in earnings per share (EPS) of the companies, a fact that has been severely punished by the impact of the pandemic. In 2020 EPS has fallen by 17% and the expert expects an advance of more than 30%.

If the financial predictions do not fail too significant bounces will be seen on the margins. This figure will be largely driven by operating leverage as well as the moderation of costs such as labor.

In fact, stocks with high operating leverage outperformed the market in 2020 and Goldman Sachs expects this trend to continue throughout the year thanks to the rebound in the economy.

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