Bloomberg (Bloomberg is gated) citing a note from GS equity strategists.
GS say that consumer belt-tightening flowing into corporate earnings is a bigger risk to US equities than stock-selling by American households
- High inflation and declining asset prices have started to strain household finances
- “Declining consumer spending does represent a threat to earnings for Consumer Discretionary stocks and the Autos industry group in particular,” they said. “Used car prices have declined 6% since January, a sign that demand for vehicles overall may be faltering. The consensus expectation of 13% industry sales growth in 2023 appears Pollyannaish.”
- Goldman still expects the S&P 500 to end the year at 4,300, compared with a median 4,650 among strategist targets compiled by Bloomberg as of mid-June.