Here are the 6 risks Goldman Sachs says US equity investors are ignoring

Via a GS note from US equity strategists.

Goldman Sachs expects the S&P500 to be higher at year end, around 3,000. GS see the coronavirus scare receding and a rebound for the economy.
But, says the bank, the next 3 months will bring a near 20% decline, targeting around 2,400.
Says the decline could be triggered by a number of concerns and risks:
  1. Infection rates could increase outside worst-hit NY as states reopen their economies
  2. A drawn-out economic rebound
  3. Major US banks losing profits for loan-loss reserves … the labor market is now being hit harder and thus additional reserve will be required … more companies will cancel stock-buybacks (these have been aa major source of demand pushing the stockmarket higher over the past 10 years)
  4. Companies cutting dividend payments and also capex spending (which will slow corporate growth ahead)
  5. November presidential election policies (especially on corporate tax – Dems could reverse Trump’s corporate profit-friendly tax moves)
  6. US-China tensions being stoked further as Trump turns more aggressive in his China approach
Via a GS note from US equity strategists.