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Tags: goldman | growth | stocks | selloff

Goldman: Buy Growth Stocks Like Apple, Nike, Deere as Stocks to Rally

dimaond gold and black sign with buy in big black capital letters
(Wayne Ruston/Dreamstime)

Tuesday, 16 October 2018 07:57 AM EDT

Goldman Sachs strategist David Kostin believes the painful stock-market selloff is over and investors should be buying growth stocks as they re-enter the market.

Goldman is advising clients to shift to growth stocks with an emphasis on strong balance sheets, CNBC explained. Those with lower debt levels have a better chance of surviving the Federal Reserve's tactic of continuously hiking interest rates.

Goldman's basket of growth stocks with the highest return on equity has modestly outperformed the S&P 500 this year, gaining 4.1 percent to the index's 3.5 percent. Apple, Microsoft, Nike and Deere are among the stocks in this basket, CNBC reported.

"We see limited further downside," David Kostin, the firm's chief U.S. equity strategist, said in a note quoted by CNBC. "Despite the recent sell-off, equity fundamentals are strong and we remain constructive on the path of the S&P 500," he added.

Goldman continues to call for a 2,850 price target on the S&P 500, which closed Monday at 2,750.

Other experts are just as optimistic that the worst of the recent market selloff is over.

White House economic adviser Larry Kudlow on Sunday played down the U.S. stock market drop as a normal correction.

"I think the background is very positive for the stock market and I think, as I said, corrections come and go and people should ... stay very calm over these things, they are quite normal," Kudlow told the "Fox News Sunday with Chris Wallace" program.

The Dow Jones Industrial Average dropped more than 800 points on Wednesday, which was fueled in part by worries over higher interest rates.

"These kind of corrections are absolutely normal. The economy is in terrific shape. We are in an economic boom," Kudlow said.

Kudlow also said President Donald Trump had some concern the Federal Reserve may be raising interest rates too fast but respected its independence.

The Fed has raised interest rates three times this year as it seeks to prevent a vibrant economy from overheating.

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StreetTalk
Goldman Sachs strategist David Kostin believes the painful stock-market selloff is over and investors should be buying growth stocks as they re-enter the market.
goldman, growth, stocks, selloff
329
2018-57-16
Tuesday, 16 October 2018 07:57 AM
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