S&P will rise to 2,100 in 2015, says Goldman report

TradingPub Admin | May 22, 2013

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If you want some free trading education, it might be helpful for you to learn about a Goldman Sachs Group Inc. prediction that the S&P 500 Index will increase to 2,100 in the next few years.

Bullish prediction
According to a report released by David Kostin, the New York-based chief U.S. equity strategist for the investment bank, the benchmark group of stocks will finish 2013 at 1,750, end 2014 at 1,900 and then reach 2,100 in 2015, Bloomberg reports.

In addition, the market expert has predicted that if interest rates continue to stay at their current lows as the S&P 500 rises, then the benchmark index could appreciate to even greater values than he has predicted so far, MarketWatch reports.

Kostin noted that the current quantitative easing of the European Central Bank, Federal Reserve and Bank of Japan puts downward pressure on the yields of sovereign securities, according to CNBC.

These low interest rates are one factor that the market expert cited as potentially contributing to the strong rally in the S&P, and researchers working for the Federal Reserve Bank of New York have also predicted that stocks will be pushed higher amid this environment of record low interest rates, Bloomberg reports.

Another factor that Kostin cited as helping to drive the benchmark group of stocks higher was the dividends, as he noted that a wide range of companies contained in the S&P 500 Index bolstered these payments in 2013, according to the news source. He specifically predicted that by 2015, these dividends will surge 30 percent.

Growth in the payments "has been pretty robust," Kostin said in a phone interview today. "A lot of companies with these super high margins are distributing more cash to shareholders with high dividends."

He noted that Apple started making these payments in 2012, and has since become the "largest dividend payer in the S&P 500," CNBC reports. Kostin indicated that "We expect the strongest dividend growth from information technology, financials and consumer discretionary."

Strong performance
The market expert has released his strongly bullish prediction after the S&P 500 has surged approximately 17 percent in 2013, extending the gains of more than 13 percent that the group of stocks made in 2012. He described the strong rally as being a "substantial and powerful move in equity prices," according to Bloomberg.

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