Goldman Sachs Portfolio Strategy Research published its US Quarterly Chartbook yesterday, reviewing the performance of major financial markets in the first quarter of 2014. The report highlights that the S&P 500 has already clawed back from the January and early February swoon to post a 2% gain for the year. Goldman Sachs is calling for another 3% rise in the S&P 500 (INDEXSP:.INX) this year. The overview of the report summarizes GS analysts David J. Kostin and colleagues current perspectives on the markets:
“S&P 500 began 2014 with a pullback of 6%, repeating its 2013 trend, but then rallied 8% to reach a new high of 1885. The market has not had a drawdown of 10% since the summer of 2012, rallying nearly 50% during that time. Gold and bonds have outperformed stocks YTD. Utilities and Health Care have paced the S&P 500 while Consumer Discretionary (which led 2013) is the laggard. As US GDP growth accelerates and interest rates rise, we recommend our rebalanced Rate Sensitive basket (GSTHUSTY), firms with a high degree of operating leverage (GSTHOPHI), and cyclical sectors Industrials, Information Technology, and Consumer Discretionary.”
Gold, utilities and health care strong in 2014
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The GS report includes an informative graphic making it clear that gold, utilities and health care stocks have been the best relative performers so far this year. Bonds have also performed relatively well, with both the oil markets and the consumer discretionary sector lagging.
Top names for sales growth
Kostin et al suggest investors take a close look at companies with strong sales growth. According to Exhibit 2, the top names to consider for sales growth so far in 2014 are Gilead Sciences, Inc. (NASDAQ:GILD) (47%), Facebook Inc (NASDAQ:FB) (44%) and salesforce.com, inc. (NYSE:CRM) (30%).
S&P 500: Top names for EPS growth
Top names for 2015 sales growth
Projecting forward to next year, Goldman Sachs anticipates that Facebook Inc (NASDAQ:FB)’s 31% sales growth will outstrip Gilead Sciences, Inc. (NASDAQ:GILD)’s 29% sales growth. Salesforce.com, inc. (NYSE:CRM) remains in third place with 24% anticipated sales growth.
S&P 500: Top names for 2015 EPS growth
Exhibit 5 suggests that Gilead Sciences, Inc. (NASDAQ:GILD) will remain on top for EPS growth in 2015 with a projected 51% growth, followed by Ford Motor Company (NYSE:F) and Facebook Inc (NASDAQ:FB) with an anticipated 42% and 33% EPS growth, respectively.