The S&P 500 Index is now trading near its fair value, with limited further upside after its 19% climb so far this year, according to Goldman Sachs Group Inc.
“The path forward for index ROE is likely to be challenging, although lower interest rates and lower tax rates may provide support,” Goldman strategists including David Kostin wrote in a note to clients, referring to return on equity. Negative revisions to 2020 earnings-per-share forecasts and “policy uncertainty” will limit upside potential, they wrote.
