Goldman Sachs has end-2016 target at 2100

Strategists at Goldman Sachs have a year-end target of 2100 this year (spot is at 2091) and then see the market trading flat next year.

They say the Fed could hike faster than the market is expecting and that will keep a lid on equities. Earnings haven't been rising but low yields have pushed valuations higher and that will change in a rate hiking cycle.

They see earnings growth of 10% next year but that will be balanced by the traditional 10% decline in valuations at the start of the earnings cycle.

To me, that sounds overly simplistic. Other hiking cycles had higher implied or expected terminal tops while most only expect a few hikes this time and only one or two in 2016.

Overall, the like financials, banks and insurers while avoiding high dividend stocks.

Goldman Sachs likes 17 US stocks for 2016 and has a buy rating on all of them.

  • Amazon
  • Chipotle
  • Lowe's
  • Priceline
  • Starbucks
  • Time Warner
  • Estee Lauder
  • Monster Beverage
  • Marathon Petroleum
  • Visa
  • Paypal
  • MasterCard
  • Alphabet
  • Facebook
  • Cognizant Technology
  • Bristol-Myers
  • Amgen