Goldman: Trump rally has another 5% to go before political uncertainty sinks it later this year

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Stock market gains may continue through the end of March, but could vanish later in 2017 as political tension under President Donald Trump intensifies, according to Goldman Sachs.

"We expect hope will continue to lift S&P 500 to 2,400 in Q1 [first quarter] before the reality of politics brings stocks lower later in the year," Goldman's chief U.S. equity strategist, David Kostin, wrote in a note to clients distributed Monday.

The 2,400 level presented by Goldman implies a gain of nearly 5 percent from Friday's close.

"Record-high equity prices and low volatility suggest investors are focused on the potential for better economic growth instead of the risks implied by elevated policy uncertainty," Kostin wrote.