Goldman Sachs strategist cuts S&P 500 target to 4,300 amid market turmoil

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Goldman Sachs strategist cuts S&P 500 target to 4,300 amid market turmoil

White glove investment bank Goldman Sachs is coming out of hibernation.

Goldman chief U.S. equity strategist David Kostin slashed his year end S&P 500 target to 4,300 from 4,700 in a new note to clients, saying investors have been mauled by a bear market plunge that took place after the market's Jan 3. peak. The index ended Friday's session at 4,023. Kostin said that the cut was a result of higher interest rates and slower economic growth than we previously assumed. The S&P 500 would drop to 3,600 after a recession, according to Kostin. The chance of a recession in 2023 is 35%, according to Goldman's team.

Kostin said the S&P 500 had a sixth week of declines. Large chunks of the markets are in bear territory, notably Amazon, Meta, and Netflix.

Markets were expecting to open in the red on Monday as traders digested recession fears and lackluster growth data from China.

Market sentiment is not helping, because of the fresh bearish talk of Kostin's colleagues.

Goldman Chief Economist Jan Hatzius has reduced his second quarter GDP estimate to 2.5% from 2.9% over the weekend.

In a new note, Hatzius said that consumer spending in late April and early May had slowed, possibly due to tighter financial conditions and higher consumer prices.

The former Goldman CEO Lloyd Blankfein was the first top bank executive to publicly warn of a recession, telling Face the Nation that there is a very, very high risk of a recession.

If I were running a big company, I would be very prepared for it, Blankfein said. Stock prices have fallen further in a recession scenario. If I was a consumer, I would be prepared for it. It is not baked in the cake. You can follow Sozzi on Twitter and LinkedIn.