What Trade War? Goldman Sachs Sees S&P 500 Exploding to 3,000

Despite the escalating trade rhetoric between the U.S. and China, Goldman Sachs continues to see good upside for stocks.

Author:: Brian Sozzi
Publish date:: Jul 12, 2018 9:45 AM EDT

TheStreet

Back up the truck and buy stocks, the U.S. trade war with China is old news.

Or so hints Goldman Sachs (GS) - Get Report . Goldman strategist David Kostin is out Thursday with a note calling for a 5% rise in the S&P 500 Index I:GSPC to $2,850 by year end. Kostin's S&P 500 target for 2019, a year where growth could fall off a cliff amid heightened trade tensions and rising interest rates, is a healthy 3,000.

Kostin's note was riddled with the upbeat nature of a bullish investment bank. Some of the headlines in the report:

"Earnings-driven bull market will continue as S&P 500 rises by 5% to 2850 at year-end 2018"
"Fundamentals: Above-trend economic growth, profit cycle continues; Buybacks source of net share demand"
"Strategies: High sales growth, capital return, strong balance sheets, and low labor cost"

Kostin's call is mostly rooted in a bullish outlook for corporate profits, despite modeling for a three-year growth slowdown starting in 2019 (see below). He expects minimal price-to-earnings multiple expansion for the S&P 500 Index next year.

Why you still reading this? Goldman told you to buy, go pull the trigger...