TechFlow news, on March 3, according to Jinshi News, Goldman Sachs analysts warned that any rebound in the S&P 500 index may be short-lived, and U.S. stocks could face a "difficult year." Goldman Sachs strategist David Kostin stated that current investor positioning levels "have not yet fallen low enough to generate a tactical rally through pessimistic positioning," and lowered its forecast for annual earnings growth of U.S. equities from 11% to 9%.
Data shows that the S&P 500 has risen only 1% year-to-date, while the MSCI World ex-U.S. Index has gained 5%. When U.S. stocks underperformed the international benchmark by more than 2.8 percentage points in mid-February, historically they have never gone on to outperform the global market for the full year. Analysts point out this is "a rare, historic, and dangerous signal indicating unfavorable prospects for a full-year recovery."
The weakness in U.S. equities is mainly driven by fading momentum among the "Magnificent Seven," stagflation risks, and uncertainty surrounding Trump's proposed tariff policies. In contrast, the STOXX Europe 600 Index has a forward P/E ratio of just 14 times, significantly discounted compared to the S&P 500's 21 times; the Hang Seng Index has risen 14% year-to-date, and the STOXX Europe 600 has gained 9.8%, both significantly outperforming U.S. stocks.
The Goldman Sachs analyst team believes that since optimistic expectations for U.S. stocks have already been excessively priced into the market, while other markets hold potential for upside surprises, U.S. equities may face further downside risks.
