Goldman's Abby Joseph Cohen Changes Her Bullish Tone
Abby Joseph Cohen, american economist, speaks during the annual meeting (Photographer: Jonathan Fickies/Bloomberg)

Goldman's Abby Joseph Cohen Changes Her Bullish Tone

(Bloomberg) -- Goldman Sachs Group Inc.’s famously bullish strategist Abby Joseph Cohen has let a shade of doubt creep into her usually sunny views on the stock market.

After equities tumbled into a correction for the first time in two years, the strategist suggested that the S&P 500 Index will have trouble topping its Jan. 26 record of 2,872.87. The index slumped 0.3 percent as of 12:31 p.m. in New York, leaving it almost 8 percent below that.

“You need to have valuation support to be at sustained high levels” in the stock market, Cohen said in a Bloomberg Radio interview Tuesday with Tom Keene and Jonathan Ferro.

The firm’s equities strategist David Kostin sees the S&P 500 Index reaching 2,850 by the end of 2018, below the average estimate of 2,940 among strategists tracked by Bloomberg. Cohen urged caution if the gauge trades that high.

With the S&P 500 at around 2,850, “several years of ongoing profit growth and no recession” are priced in, she said.

Goldman's Abby Joseph Cohen Changes Her Bullish Tone
Goldman's Abby Joseph Cohen Changes Her Bullish Tone

Cohen also said that Goldman strategists “remain concerned about fixed-income.” Bonds “will be rising in yield,” she said, “not just in the U.S. but around the world.” The recent drop in bond prices “should not have been a surprise to anyone,” she continued.

Cohen, who’s a senior investment strategist at the firm, also said that “government policy coming out of Washington, to my eyes, is not supportive of sustainable intermediate and long-term economic growth.”

She cited changes in tax policy, budget proposals, infrastructure plans and trade policy as factors that don’t help longer-term growth.

©2018 Bloomberg L.P.

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