High-quality companies with low debt loads will pace a stock market set for a substantial gain in 2019, according to Goldman Sachs strategists.
In the big picture, Goldman sees the S&P 500 ending the year at 3,000, implying an 18.5 percent gain from Friday's close after a year that saw the large-cap barometer fall 6.2 percent. The firm believes investors are overly pessimistic about the growth potential for the U.S. economy, even though Goldman projects GDP rising just 1.9 percent for the year.
"The low starting level and valuation of the market suggest positive returns to US equities in the coming year," wrote David Kostin, Goldman's chief U.S. equity strategist. "Our baseline forecast is that the US economic expansion continues and that 6% EPS growth combined with multiple re-rating to 16x will lift the S&P 500 to 3000 by year-end."