Too High or Too Low? Wall Street Split on Profit Margin Outlook
- Goldman strategists see margins supporting S&P 500 in 2024
- Elevated profit margins one of key risks for stocks: JPMorgan
The split highlights the difficulty facing investors in trying to decipher mixed economic signals and uncertainty over the timing of interest rate cuts.
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Strategists at Wall Street’s two top-tier banks are split on the outlook for profit margins: Goldman Sachs Group Inc. sees falling inflation boosting the key metric, while JPMorgan Chase & Co. warned companies are quickly losing pricing power.
Goldman’s David Kostin said the S&P 500 will rise slightly in 2024 as companies benefit from faster cooling in raw material and labor costs. “Concerns about recession and Fed tightening are abating, and profitability for the broader index should continue to improve,” he added.