The relationship between the USA and China is currently very tense. An agreement in the customs conflict between the United States and China made it easier for the stock markets. Goldman Sachs then raised his forecast for the S&P 500.
• USA and China reduce mutual import duties
• Goldman Sachs more optimistic: S&P 500 target raised
• Team around Kostin recommends title with a high pricing power
Customs conflict between the USA and China
The relationship between the USA and China is currently very tense. US President Donald Trump had occupied goods from China with tariffs of 145 percent-Beijing reacted to US goods with counter-tariffs of 125 percent. Both sides had initially tried to give the impression that they would have to sit on the longer lever and not take the first step to approach the other. However, after the trade between the two nations was hardly profitable and almost came to a standstill, delegations on both sides recently met in Geneva.
The result of the customs talks was a small agreement: the United States and China decided to reduce tariffs. The regulation applies, as can be seen from a joint explanation, but initially only temporarily for 90 days. The US tariffs to Chinese imports drop to 30 percent, while China’s tariffs against imports from the United States go back to 10 percent.
Hope inspires the markets
On the stock exchanges, the agreement between the USA and China made relief. On Monday, the Hang Seng closed 2.98 percent higher at 23,549.46 points. The Shanghai Composite ultimately identified a surcharge of 0.82 percent to 3,369.24 points, while Nikkei in Japan 0.38 percent more firmly went to the end of 37,644.26 units.
The US feature index Dow Jones has ended the session 2.81 percent higher at 42,410.10 points. The tech value index Nasdaq Composite also attracted vigorously and ultimately increased 3.26 percent to 5,844.18 points. With the S&P 500, significant profits have also been booked. Here, too, things went up clearly in the further course until he went to the end of the day at 3.35 percent more at 18,708.34 units.
Goldman Sachs more confident for S&P 500
The analysts of Goldman Sachs recently warned of possible setbacks for the market-wide US index S&P 500 in the face of growing recession risks through new tariffs. Against the background of the latest developments in the customs dispute between China and the USA, the strategists are now becoming more confident: they have raised their prognosis for the S&P 500 from previously 5,900 points to 6,100 points. “We raise our return and profit forecasts for the S&P 500 in order to consider lower tariffs, better economic growth and a lower risk of recession than previously expected,” says Marketwatch from a message from the team under the direction of the chief strategist for US shares David Kostin. Nevertheless, according to Bloomberg, Kostin also warned: “The already optimistic evaluation of the economic growth prospects by the market and the uncertainty about the extent of the upcoming slowdown of economic and profit growth will probably limit the shareholder in the next few months.”
Meanwhile, chief economist Jan Hatzius, according to Marketwatch, reduced the probability of a recession from 45 percent to 35 percent in a separate message. Decisive factors are lower growth risks from tariffs, fewer supply chain disorders and positive signals in US trade policy towards China.
Other experts also share the new optimism: Ed Yardeni from Yardeni Research has increased his forecast for the S&P-500 from 6,000 to 6,500 points for 2025 and reduced the probability of recession from 35 percent to 25 percent. Wall Street strategist Christopher Harvey by Wells Fargo Securities with a price target of 7,007 points until the end of 2025 is currently called the highest forecast for the S&P 500.
More forecasts raised
The Goldman Sachs strategists have also significantly increased the winning expectation for companies in the S&P 500. For 2025, analysts now expect profit growth per share to $ 262 – previously the forecast was 3 percent. For 2026 you expect a further increase of 7 percent to $ 280.
In addition, the estimated price-profit ratio (KGV) was increased from 19.5 to 20.4 for the next twelve months. Although the current KGV of 21 is in the upper historical area, the new evaluation still reflects “less uncertainty, faster profit growth, lower inflation and the regained trust in the fundamental data of the greatest stocks in index”. However, the experts emphasize that “the still high uncertainty harbors risks for the yields and the evaluation”.
Investors should rely on these shares
When selecting stocks, the team led by Kostin investors recommend relying on titles with a high proportion of the price that are able to pass on increased production costs to their customers without having to accept significant loss in demand. Even if the economy improves, the tariffs should remain higher than in the previous year, which the profit margins put under pressure, according to the analysts. In such a environment, companies with high price laws usually perform better. This was already observed in the trade conflict between the United States and China for Trump’s first term, reports Marketwatch. These shares with high pricing power include Meta Platforms, Electronics Arts, Playika Holding, Booking Holdings, Wingstop, Etsy, Doximity, Sherwin-Williams, Paychex, Nordstrom, Snap-On, Coca-Cola, Colgate-Palmolive and Adobe.
Editor finance.net
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