Goldman Sachs’ new strategist told clients that the S&P 500 is likely to decline further in the coming weeks as a number of U.S. corporations, which are reporting first-quarter financial results, are likely to lower their 2008 earnings guidance.
“Although only a few firms have reported first-quarter results, early signs are awful. … We expect generally disappointing results and a swath of lowered profit guidance that will drive the S&P 500 lower in coming weeks,” Goldman Sachs U.S. strategist David Kostin wrote today in the note to clients. “Our message to investors is stick to the fundamentals … pay close attention to the conference calls of these firms to gauge the state of the U.S. economy,” Mr. Kostin also wrote.
Mr. Kostin last month replaced Abby Joseph Cohen, Goldman’s longtime investment strategist who had been bullish on the S&P 500 outlook for 2008, expecting the benchmark index to end the year at 1,675.
