U.S. Economic Growth Is Peaking And That Means Stocks Could Struggle This Year, Goldman Warns

U.S. Economic Growth Is Peaking And That Means Stocks Could Struggle This Year, Goldman Warns

Share to Linkedin As the economic benefits of massive fiscal stimulus and businesses reopening reach their peak in the coming weeks, Goldman Sachs analysts are warning that U. S. economic growth will slow, leading to "paltry" stock returns over the next year and an end to the market's massive pandemic rally. Traders work during the opening bell at the New York Stock Exchange. U. S. economic growth will peak within the next two months, Goldman analysts said in a Thursday morning note, forecasting that gross domestic product will grow by an annualized 10. 5% rate in the second quarter, the strongest expansion since 1978 aside from the economy's stark mid-pandemic rebound in the third quarter of last year. Economic growth will then "slow modestly" in the third quarter and continue to decelerate over the next several quarters, the analysts predicted, adding that such deceleration is typically associated with weaker stock returns and higher market volatility. In a sign that fiscal stimulus effects and economic activity are peaking, the ISM Manufacturing index, a monthly economic indicator measuring industrial activity, registered at 65 in March“”above the threshold of 60 that Goldman says typically represents peak economic growth. According to Goldman, the S&P