The stock market's swift comeback to record highs opened a new chapter on Wall Street, and the fresh bull market has a long way to go, according to Goldman Sachs.
The S&P 500 quickly bounced back from its March bottom as investors looked past the coronavirus turmoil and focused on a brighter future. Unprecedented fiscal and monetary support in Washington also played a critical role in the market's resilience, which will drive stocks higher in the long run, the bank said.
"We believe that we are still in the early stages of a new bull market, transitioning from the 'Hope' phase to a longer 'Growth' phase as strong profit growth emerges," said chief global equity strategist Peter Oppenheimer said in a note.
"The changing mix of policy support in this cycle also suggests a possible inflection point towards a more reflationary environment than we have seen since the financial crisis," Oppenheimer added. "This regime shift is likely to drive the bull market higher over coming months and also have important implications for market leadership."
The Wall Street firm sees six specific pockets of the market that will have larger-than-average upside this year in the economic recovery.