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The US stock market has more room to expand and isn’t overpriced, says a top Goldman Sachs exec.
Abby Cohen, president of Goldman Sachs Group’s Global Market Institute, is confident stocks are fairly priced despite trading at over 18 times estimated earnings, Bloomberg reports. Yet in order for stocks to reach next year’s forecasts, they need to increase profits by at least 13%, a feat that hasn’t been accomplished since 2011.
Cohen says markets abroad are expensive compared to the US, especially when factoring in gains in the US labor market. “If we’re correct that there’s not a recession,” Cohen says, “we expect US stock prices to move higher, not in a straight line, but to drift up.” [Bloomberg]
