AUG 15 20 ND SIT EC y POL
ND denounce Global-neoliberal debacle y propone State-Social + Capit-compet in Eco
ZERO HEDGE ECONOMICS
Neoliberal globalization is over. Financiers know it, they documented with graphics
WHY GOLDMAN JUST RAISED ITS S&P PRICE TARGET BY 20% TO 3,600
"Looking forward, a falling ERP will outweigh a rise in bond yields, and combined with our above-consensus EPS forecast, will lift the S&P 500 index to 3600 by year-end (+7%). Our prior forecast was 3000."
Goldman nuked its EPS forecast after the US economy basically shutdown to "fight" the covid pandemic, and cut its near-term S&P forecast to 2,000:
In the near-term, we expect the S&P 500 will fall towards a low of 2000. The stock market is a leading indicator of business trends, and corporate activity continues to deteriorate with no signs yet of a bottom. The first quarter has not even ended and companies have yet to release 1Q results but equities have already collapsed by 32% in one month. The speed of business erosion is unprecedented.
SEE CHART:
A sudden stop in 02, followed by a gradual recovery
https://www.zerohedge.com/s3/files/inline-images/GS%20sudden%20stop_1_0.jpg?itok=KLUkAR1S
To be sure, Goldman also hedged its bet laying out what it thought was the absolute upside case: one where in the aftermath of the economic collapse, the market - if not the economy - would recover its losses:
If all goes according to plan, S&P 500 EPS will leap by 55% to $170 in 2021, and the index will end 2020 at 3000 (30% above the current level). Earnings and investor sentiment will be recovering later in 2020.
Well, fast forward to today, less than five months later, when the S&P is now more than a 1000 points above its March 23 lows, closing Friday at a whopping 3,372.85 and just shy of its all time high, and when suddenly the stock market is no longer a "leading indicator of business trends" as Goldman so aptly put it back in late March.
That's also why Goldman's optimism has migrated to the broader market, and the bank's 2021 EPS estimate of $170 is also above the current consensus of $165:
We expect S&P 500 earnings will contract by 21% this year before rebounding by 30% next year and 11% in 2022 (5% CAGR).
SEE Chart:
We forecast a sharp rebund in S&P 500 EPS through 2022
https://www.zerohedge.com/s3/files/inline-images/GS%20EPS%20rebouind.jpg?itok=b6aIGfAw
And yet in an economy where there are tens of million unemployed and a record number of companies filing for bankruptcy, the cognitive dissonance between the economic abyss and record stocks is screaming; so much so that even Goldman had to admit that few things make sense. Case in point, Goldman is now justifying its ludicrous - if very much probable - price targets not based on profits or cash flows, but simply on the discount rate used to pull future earnings to the present.
And yet, to explain away this centrally planned "market", this is the kind of bullshit Goldman has to resort to to validate why a record high forward PE multiple...
See Chart:
S&P Forward P/E Multiple
https://www.zerohedge.com/s3/files/inline-images/fwd%20PE%20aug%2015.jpg?itok=mTRSSnU8
And with every other metric screaming record overvaluation, there is the old faithful "Fed model" explanation, aka the Equity Risk Premium that stocks are in fact cheap, that just because bond yields are at all time lows (which is due to central banks buying all gross issuance), so stocks are expensive if only in comparison to bonds. Once again, a purely academic exercise in goal seeking a selling point, but that's what Goldman has been reduced to in a "market" where David Portnoy outperforms not just Warren Buffett...
See Chart:
Retail day-traders vs. Hedge Funds vs . S&P 500
https://www.zerohedge.com/s3/files/inline-images/retail%208.15.jpg?itok=pLMbC3Ef
but the market itself: on net, the ERP has increased by nearly a full percentage point, to 6.3% from 5.4%. But falling bond yields means the effective cost of equity is unchanged at 7.0% (Ex. 9).
See Chart:
We expect the improving macro backdrop will push the ERP lower montly as of August 13, 2020
https://www.zerohedge.com/s3/files/inline-images/GS%20ERP.jpg?itok=rPGT9373
Thoroughly red-faced by this point, Kostin has no choice but to "explain" some more how stocks are cheap if one only focuses exclusively on the equity risk premium which is meaningless in a world where central banks have nationalized the bond market and rates no longer provide any future discounting signal:
Changes in the ERP are driven by many factors, including the strength of the economy today, the expected state of the economy going forward, and the confidence investors have in that forward path.
The risk premium for US equities is likely to decline by year-end 2020 (to 5.7%) and during the first half of 2021 (to 5.2%).Under their baseline forecast, our economists expect nominal Treasury yields will rise by 50 bp to 1.1% by year-end and to 1.4% in 12-months, led by higher breakeven inflation and higher real rates [ZH: this will be the 11th year in a row in which Goldman has incorrectly predicted higher rates].
A fall in ERP will be partially offset by a rise in bond yields but the combination will ultimately boost the S&P 500 index to 3600 by year-end (+7%) and to 3800 (+6%) in 12-months’ time.
See Chart:
S&P 500 Price
https://www.zerohedge.com/s3/files/inline-images/GS%202020%20target.jpg?itok=ZUWjMLg1
Our revised year-end 2020 price target represents a significant increase from our previous forecast of 3000, driven by valuation. In February 2020, the S&P 500 traded on a FY2 P/E multiple of 17x consensus 2021 EPS. Today, the market trades at 20x consensus 2021 EPS. Our year-end target of 3600 implies a P/E multiple of 21x our 2021 EPS estimate.
See Table:
Implied S&P500 valuation in different rate and ERP Scenarios as of AUG 13-20
https://www.zerohedge.com/s3/files/inline-images/GS%20implied%20yields.jpg?itok=tjwPbbKb
Prediction markets imply post-election Democratic control of Washington, DC. Equity investors are most focused on the prospect of higher corporate tax rates.
IN SHORT, Goldman admits that "election uncertainty suggests near-term risk to our target is tilted to the downside. Of course, the largest risk to our forecast is the timing of a vaccine and path of recovery from the pandemic."
Stated otherwise, everything can - and will - go wrong, and just because Goldman desperately needs to cash out before it does it has no choice but to boost its S&P price target to get the handful of investors who are still on the fence about stocks to buy whatever Goldman has to sell, before everyone else joins the liquidation puke.
….
SOURCE: https://www.zerohedge.com/markets/why-goldman-just-raised-its-sp-price-target-20-3600
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WHY GOLDMAN JUST RAISED ITS S&P PRICE TARGET BY 20% TO 3,600
You have the answer in the art above
"Looking forward, a falling ERP will outweigh a rise in bond yields, and combined with our above-consensus EPS forecast, will lift the S&P 500 index to 3600 by year-end (+7%). Our prior forecast was 3000."
SEE CHART:
We now expect S&P 500 will end 2020 at 3600 as of AUG 13, 2020
https://www.zerohedge.com/s3/files/inline-images/GS%202020%20target.jpg?itok=ZUWjMLg1
….
SOURCE: https://www.zerohedge.com/markets/why-goldman-just-raised-its-sp-price-target-20-3600
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US DOMESTIC POLITICS
Seudo democ duopolico in US is obsolete; it’s full of frauds & corruption. Urge cambio
THE EVOLUTION OF FIAT MONEY, ENDLESS WAR, & THE END OF CITIZENSHIP (PART 2)
War, regime change, US Dollar fiat imposition – lather, rinse repeat...
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This is a grossness distortion from Reps Party
'BLACK LIVES MATTER'-MOB DEMANDS WHITE PEOPLE GIVE UP THEIR HOMES
“Now we’re bringing it to your front door!”
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CRONY CAPITALIST EXECS CHEER SELECTION OF KAMALA HARRIS AS DEM VP
Cautious, corporate-friendly, unthreateningly-progressive politics
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US-WORLD ISSUES (Geo Econ, Geo Pol & global Wars)
Global depression is on…China, RU, Iran search for State socialis+K-, D rest in limbo
For Pompello, the PENTA’ agent, this is regular business. For US nation it’s risk of WW3
TAIWAN SIGNS DEAL FOR LARGE BATCH OF US F-16 JETS AS CHINA TENSIONS ON BRINK
New contract for delivery of 66 jets added to the self-ruled island's existing fleet of F-16s...
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HEZBOLLAH "WILL NOT REMAIN SILENT": NASRALLAH SUGGESTS ISRAELI INVOLVEMENT IN BEIRUT PORT BLAST
He said if Israel is linked to the disaster,the truth will not be reached in light of the FBI’s participation in the ongoing investigation.
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Belarusian president Alexander Lukashenko said that an air assault brigade would move to Belarus’ Western border in response to NATO exercises in neighboring nations, even as the country reels from massive anti-government protests which Lukashenko has dubbed a "color revolution" orchestrated by foreign agents.
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ISRAEL NOT GIVING UP ON ANNEXING WEST BANK, NETANYAHU SAYS, AFTER HISTORIC UAE DEAL
“The American president asked me towait... there is no change to my plan to extend sovereignty.”
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SPUTNIK and RT SHOWS
GEO-POL n GEO-ECO ..Focus on neoliberal expansion via wars & danger of WW3
- Zarif Slams US Claims of Seizing Iranian Tankers, Says ‘Propaganda Doesn’t Deflect’ Failure at UN
- Man Arrested in UK Over 'Dangerous Orange Donald Trump' Pills
- US President's Younger Brother Robert Trump Has Died Our condolences t Trump F
-CA Initiates Rotating Outages Set to Impact Over 200,000 Customers Amid Heat Wave
- US NORAD Fighter Jets Intercept Plane Violating Airspace Near Trump Golf Club
- More Bans? Trump Considers Prohibiting Alibaba From Operating in US
- Netanyahu Slams UN Decision Not to Allow Extens of Arms Embargo on Iran
- UNSC Reject of Iran Arms Embargo Extens 'Makes Major Conflict Much More Likely'
- ‘Tribute in Light’ Display in NYC honoring 9/11 to Take Place Despite Cancell Plans
- Trump on Pardoning Edward Snowden: 'I'm Going to Look at It'
- Trump: US Will Trigger UN 'Snapback' Sanctions Mechanism Against Iran Next Week
- Taylor Lashes Out at Trump in Twitter Over 'Calculated Dismantling of USPS'
- Arizona Elections Czar Accuses Trump of Trying to Sabotage Mail-in Voting
- Two Rockets Hit Iraq's Taji Camp Which Hosts US-Led Coalition Troops
- Putin’s Iran Online Summit Proposal: UNSC Best Place to Discuss Arms Embargo
- Footage of US Navy Spy Plane Being Intercepted by Russian Su-27 Fighter
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NOTICIAS IN SPANISH
Lat Am search f alternatives to neo-fascist regimes & terrorist imperial chaos
RT EN ESPAÑOL
Trump a punto de prohibir la actividad de la empresa china Alibaba en EE.UU https://actualidad.rt.com/actualidad/363335-trump-estudia-posibilidad-prohibir-alibaba-eeuu
US mintió sobre incautac de cuatro petroleros que se dirigían a Ven con Petroleo iraní https://actualidad.rt.com/actualidad/363303-rohani-eeuu-mintio-incautacion-petroleros-venezuela
Lukashenko traslada brigada de asalto aéreo a la frontera por actividad de la OTAN https://actualidad.rt.com/actualidad/363341-lukashenko-ordena-trasladar-brigada-aereo-frontera-occidental
US Impone una condición para conceder apoyo financiero al Líbano (chantaje) https://actualidad.rt.com/actualidad/363330-departamento-eeuu-libano-recibir-apoyo-reformas
Rusia produce el primer lote de la vacuna Sputnik V contra el coronavirus https://actualidad.rt.com/actualidad/363299-rusia-produce-primer-lote-vacuna-coronavirus
Trump estudiará "con mucha atención" el posible indulto a Edward Snowden https://actualidad.rt.com/actualidad/363336-trump-considerar-perdonar-snowden El indulto le dará los votos que necesita para ganar las elecciones. Si él no lo hace Biden Si
Protestas en Washingt contra planes de Trump de cortar los fondos de Servicio Postal
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GLOBAL RESEARCH
Geopolitics & Econ-Pol crisis that leads to more business-wars from US-NATO allies
Trump Targets TikTok and Escalates Trade War Betw U.S. and China By P A
Critical Assessment of Kamala Harris for Vice President By Binoy Kampmark,
Russia’s Sputnik V COVID-19 Vaccine Now Available By Stephen Lendman,
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