US stock market record rally irrational – Goldman Sachs

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https://www.rt.com/business/378077-goldman-stock-markets-cognitive-dissonance/

Wall Street bank Goldman Sachs has seen “cognitive dissonance” in the stock market surge after Donald Trump won the US presidency. While the Dow Jones, Nasdaq and S&P 500 are posting record highs daily, Goldman is pessimistic about the rally.

“Cognitive dissonance exists in the US stock market. S&P 500 is up 10 percent since the election despite negative [earnings per share] revisions from sell-side analysts,”said David Kostin, the chief US equity strategist at Goldman Sachs.

The rally in US stocks is explained by Donald Trump’s promises of tax cuts, more infrastructure spending, less regulation and other protectionist measures, which boost confidence in the American economy.

“Investors, S&P 500 management teams, and sell-side analysts do not agree on the most likely path forward. On the one hand, investors, corporate managers, and macroeconomic survey data suggest an increase in optimism about future economic growth. In contrast, sell-side analysts have cut consensus 2017E adjusted EPS forecasts by one percent since the election, and ‘hard’ macroeconomic data show only modest improvement,” Kostin continued.

However, politics is hard, and Trump is yet to implement his business-friendly promises, warns Kostin.

“Sell-side analysts appear hesitant to incorporate potential tax reform and deregulation into their estimates given elevated policy uncertainty. Positive revisions to aggregate S&P 500 EPS estimates are rare — during the last 33 years, consensus EPS estimates have been revised upward from their starting point just six times,” he said.

———

guess which investment company went “short” not “long” the DJIA?? 😉

they are sort of right though..the rally is madness..

Cognitive dissonance exists in the US stock market. S&P 500 is up 10 percent since the election despite negative [earnings per share] revisions from sell-side analysts,”said David Kostin, the chief US equity strategist at Goldman Sachs.”

they know a bit about cognitive dissonance..

401

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~ by seeker401 on February 23, 2017.

9 Responses to “US stock market record rally irrational – Goldman Sachs”

  1. I’m totally long DJ since last summer.
    It doesn’t go up because of the good economy and outlook in the US. Money just goes home to the US because of the very bad outlook in EM and Europe (Euro!). It has to be parked in the $. Not bonds but equity. Was an very easy trade.
    Read Armstrong.

  2. Reblogged this on World Peace Forum.

  3. The stock market is totally rigged.
    Is it irrational that the banksters run the algorithms and pretend they don’t.
    I am sick of hearing that the market is anything but a fixed and rigged game for banksters and their minions to play . It has never been “rational” and their manipulations of it are for profit .
    The banksters through their media say “Trump farts and stocks jump” this is a symptom of a fully manipulated and rigged bullshit market using excuses after the fact but the non reasoning mind cannot see it.

    • bullshit, sockpuppet.

      yes, there is market manipulation. you could even call it massive.

      but it isn’t total.

      lowly, uneducated me has beaten the market eight of the nine last years. if you spent your time researching the issue instead of flooding blogs with your kiwi sockpuppets, you could too.

  4. Propaganda and lies seems to be now more important to people than facts and reality. The banksters market runs on just media lies( false values ) and propaganda. Holly shit its just nuts .

  5. ironically, my dog jumped on my laptop, replacing xxx with AQZ.

    in a thread where i’m complaining about sockpuppets.

    bad doggie! 🙂

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