Daily Management Review

Goldman Sachs expects European equity market growth in 2024


According to Goldman Sachs, an improving economic environment, fair prices, and long-term bond yields staying at current levels will allow the European STOXX 600 Index to reach 480 points next year, up 7.5% from its current levels.

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Since the start of the year, the STOXX 600 Index, which is primarily weighted toward the commodities and luxury goods sectors, has increased by 5%.

Goldman predicts that the index will reach its highest point since January 2022.

According to the bank's strategists, "good economic growth" and high oil prices will likely help the companies’ profits grow by 7% in the upcoming year.

Goldman forecasts that the annual GDP of the area will increase by 0.9% in 2024 and by 0.5% this year.

According to Goldman, if wage growth continues to be robust, net profit margins for European businesses may "narrow slightly" in 2024.

The bank did add, though, that it does not anticipate a recession in the area because it thinks the European Central Bank will lower interest rates when inflation starts to decline.

source: reuters.com