Michael Wilson, strategist at Goldman Sachs Group Inc. said that US stock markets are likely to continue their recent decline, and added that the S&P 500 index could reach 4,000 points by the end of this year, which is 10% below Friday's closing level.
"The catalyst for the fall of the S&P 500 to 4,000 points could be a significant increase in the real yield of US bonds - by 60 basis points, to 0%," said David Kostin, strategist at Goldman Sachs, but noted that his main scenario is the growth of the S&P 500 index to 5,100 points.
Since the beginning of this year, the S&P 500 index has fallen by about 7% amid increased expectations of a Fed rate hike, prospects for slowing economic growth and escalating geopolitical tensions.
Meanwhile, Kostin warned that against the background of the possibility of four or more Fed rate hikes this year, as well as mixed forecasts for corporate reporting, there are downside risks for the S&P 500 index growth scenario to 5,100 points.
Both analysts agreed that in the current environment, the best strategy is to focus on quality stocks and the potential growth of energy stocks.