lPrintBy ALEXANDRA SCAGGS CONNECT REUTERS
Five-years after U.S. stocks hit their financial-crisis low, Goldman Sachs strategist David Kostin says it’s going to be an uphill battle for stocks to move significantly higher this year.Mr. Kostin points to the level of profits, expected earnings growth rates and valuations as measured by price to earnings multiples. “Given the high starting point of all three metrics, it is hard to identify any one of these that will climb significantly during the coming year.”Goldman expects the S&P 500 to finish the year at 1900, roughly 2.4% above where it was Monday morning.Looking back over the last five years, Goldman says that, contrary to skeptics who say the rally wasn’t backed by fundamentals, “earnings recovery accounts for the majority of the market rally. S&P 500 trailing EPS jumped by 69% to $110 from a low of $65 at the market bottom. The gain in earnings translates into roughly 700 index points.” The S&P 500 is up about 1200 points from its low.
via Goldman: Fuel Behind The Five-Year Stock Rally Is Running Low – MoneyBeat – WSJ.