S&P 500 on Track to Hit Record High Before Year-End, Goldman's Flood Says

With the S&P 500 up 25% in nine months and sitting at its best level since April 2022, people want to know: is an all-time high next? John Flood, a partner at Goldman Sachs Group Inc., thinks so.

“For the first time in 2023 we are currently being asked by multiple clients if we think the S&P 500 is now on track to clock an ATH before year-end,” Flood wrote in a note to clients Wednesday after a soft reading in the consumer price index lifted the equity benchmark as much as 1.1%. “I am going with a yes on this.”

Getting there would require an extension of a rally that has already shocked most on Wall Street amid better-than-expected economic growth and corporate earnings. The index made a record 4,796.56 in January 2022, about 7% above the last close.

US Stocks Have Staged a Powerful Rally Since October | S&P 500 would need to climb about 7% to reclaim its all-time high

Flood’s optimism is at odds with the majority of Wall Street strategists who keep hanging on their bearish view that the Federal Reserve’s aggressive monetary tightening will lead to an economic slowdown if not an outright recession. Their average year-end target, as compiled by Bloomberg in mid-June, shows the S&P 500 will fall about 8% by December — the worst second-half outlook since at least 1999.

Stocks have recovered all their losses since the Fed began raising interest rates 16 months ago, with the S&P 500 now trading roughly 3% above where it was at the start of the hiking cycle.