Citing a slower pace of growth for the U.S. and China, Goldman Sachs has lowered its S&P 500 earnings and price forecasts. In a note dated Sept. 28, but released on Tuesday, strategists led by Goldman’s chief U.S. equity strategist, cut the S&P 500 year-end target to 2,000 from 2,100. “‘Flat is the new up,’ will be the investor refrain for 2016,” said David Kostin in the note. “Our baseline forecast is that the U.S. economy will grow at a modest pace, earnings will rise, and the S&P 500 index will climb slowly while the [price-to-earnings] multiple declines as interest rates rise,” he said. The investment bank also cut its 2015 S&P 500 earnings-per-share forecast to $109 from $114, representing a 3% year-over-year decline in earnings. For 2016, Goldman sees the S&P climbing 5% to 2,100, with earnings per share for the benchmark coming in at $120, down from the previous forecast of $126.
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