Flat is the New Up

Goldman Sachs Exchanges

Goldman Sachs

Business

4.4 • 1K Ratings

🗓️ 9 October 2015

⏱️ 27 minutes

🔗️ Recording | iTunes | RSS

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Summary

David Kostin, chief US equity strategist at Goldman Sachs, discusses why he sees a flatter trajectory for US stocks after an ''extraordinary run," and why the decline in energy prices will have important implications for corporate profits and capital spending in 2016. This podcast was recorded on October 5, 2015. All price references and market forecasts correspond to the date of this recording. This podcast should not be copied, distributed, published or reproduced, in whole or in part. The information contained in this podcast does not constitute research or a recommendation from any Goldman Sachs entity to the listener. Neither Goldman Sachs nor any of its affiliates makes any representation or warranty, as to the accuracy or completeness of the statements or any information contained in this podcast and any liability therefor (including in respect of direct, indirect or consequential loss or damage) is expressly disclaimed. The views expressed in this podcast are not necessarily those of Goldman Sachs, and Goldman Sachs is not providing any financial, economic, legal, accounting or tax advice or recommendations in this podcast. In addition, the receipt of this podcast by any listener is not to be taken as constituting the giving of investment advice by Goldman Sachs to that listener, nor to constitute such person a client of any Goldman Sachs entity. Copyright 2015 Goldman Sachs. All rights reserved.

Transcript

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0:14.1	This is exchanges at Goldman Sachs where people from our firm share their insights on developments currently shaping markets, industries, and the global economy.
0:17.2	I'm Jake Seward, Global Head of Corporate Communications here at the firm.
0:21.0	Slower growth out of China, anticipation of a Fed rate hike in the United States, and a global
0:25.3	commodity sell-off have contributed to a decline in global markets.
0:29.5	David Kosten, Chief U.S. Equity Strategist Goldman Sachs, recently revised down his year-end outlook
0:35.5	for the S&P 500 and corporate earnings.
0:38.1	We'll talk about some of the reasons behind these expected declines and what's in store for 2016.
0:43.2	David, welcome to the program.
0:44.8	Thank you.
0:45.7	The US stock market's had a rough couple months.
0:47.6	The S&P 500 fell 7% in the third quarter,
0:50.6	the largest quarterly decline since the third quarter of 2011.
0:54.7	Walk us through why you've cut your forecast for the rest of the year.
0:58.0	So as I look out for the balance of 2015, there really three issues that caused us to lower our profit
1:06.5	forecasts and as a result of that we lowered our index target for the S&P 500.
1:11.1	The first would be slower GDP growth
1:13.8	than we had previously been assuming.
1:16.1	The data coming from China was also weaker than had been expected.
1:19.7	And I think sort of marked slowdown
1:21.8	and a number of business activities on the industrial
1:25.2	side in particular in China as opposed to the consumer and finally oil prices which
1:29.7	had had a pretty strong rally in the early part of this year and then sold off sharply.
	...

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