PCE data today: Goldman Sachs sees S&P 500 hitting 5,100 in 2024

S&P 500 opened in the green today after the U.S. Bureau of Economic Analysis said the core personal consumption expenditures price index was in line with expectations in November.  

What does it mean for the S&P 500?

For the month, Fed’s preferred inflation gauge came in up 0.1% versus a 0.2% increase in October.

The announcement arrives only days after Goldman Sachs raised its outlook for the benchmark index. David Kostin – its senior strategist now sees the S&P 500 hitting 5,100 in 2024.

Versus last year, the said index was up 3.2% in November versus the Dow Jones estimate for a 3.3% increase. S&P 500 has gained nearly 25% year-to-date.

Rate cuts will help the S&P 500 in 2024

On Thursday, the Bureau of Economic Analysis also reported the headline PCE actually down 0.1% for the month in November. Year-over-year, it was up just 2.6%.

Goldman Sachs’ Kostin is bullish on the benchmark index particularly because members of the Federal Open Market Committee recently signalled three rate cuts in 2024 as Invezz reported here.

He forecasts a 5.0% earnings growth in the coming year – which may prove to be conservative as financial conditions continue to ease and economy remains strong.

David Kostin is particularly bullish on beaten-down cyclical stocks and small caps for 2024. Last week, UBS director Art Cashin also said that S&P 500 tends to do well in an election year.