Gloomy Goldman offers 20 “safe” stocks with lower valuations than the previous two bear markets

It’s tight spots in the bear detective on Wall Street these days.

Goldman Sachs just cut its US growth forecast for 2022 (to 2.4% from 2.6%) and 2023 (to 1.6% from 2.2%), as CEO Lloyd Blankfein warned of “very, very high” risks of a US recession. .

“If I was running a big company, I would be very prepared for it. If I was a consumer, I would be prepared for it,” he said over the weekend.

Goldman Sachs is also one of the most bullish Wall Street banks heading into this year, as it lowered its end-of-2022 target on the S&P 500 to 4,300. Their new baseline forecast doesn’t assume a recession, but if it does, expect a drop to 3,600. , as they say.

Chief US Equity Strategist David Kostin said: “Although the S&P 500 companies posted a much better-than-expected first-quarter earnings-per-share growth of 11%, investors have experienced an 18% drop in the market since the index peaked. On January 3rd, note.

Our condolences award Today’s call It is a list of 20 stocks with valuations below previous bear market lows.

These companies also have size, liquidity — above-average market value is needed in times of uncertainty — and balance sheet strength, which means they are usually less sensitive to economic slowdowns because they can withstand lower credit market liquidity, Kostin and team said. .

For this attractive valuation, the metric is explained as follows: P/E after a 20% cut to projected 2023 earnings is below the forward P/E multiple at the bottom of either or both of the March 2009 and March 2020 bear markets. .

“Importantly, given the different real interest rate environments, premium stocks are valued more attractively today on a yield-gap basis compared to the rest of the index than they were in 2009 or 2020,” Kostin and the team said.

Stocks on this list, after a potential 20% decline in 2023 EPS, will still have a 2021-2023E compound annual growth rate (CAGR) of 4% compared to -2% for the mid-sized S&P 500.

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Read: ‘No place to hide?’ What’s next as stocks plunge into a bear market amid fears of stagflation

commotion

It da svidanya to Russia for McDonald’s MCD,
+ 0.35%
The fast food giant has announced plans to exit the country and sell its business there, which could cost it up to $1.4 billion. McDonald’s also wants to secure jobs for its 62,000 workers there.

TSLA Tesla,
+ 5.71%
Elon Musk said on Twitter from Twitter,
-9.67%
A legal team has accused him of breaching a non-disclosure agreement over bots, after announcing Friday that a $44 billion deal to the social media group had been put on hold.

The strict coronavirus lockdown has dented retail sales and industrial production in China, both of which are the weakest since March 2020, Deutsche Bank notes.

It’s a great week for retailer results, with Walmart WMT,
+ 0.39%
(see preview), Home Depot HD,
+ 2.19%
and target TGT,
+ 1.13%
watching his movements. Take-Two Interatcive TTWO,
+ 3.50%
Results will be reported after Monday’s close.

The Empire State Manufacturing Index for May is due for release. The other big data this week will be the release of retail sales for April on Tuesday.

markets

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US stock futures ES00,
-0.02%

YM00,
+ 0.08%

NQ00,
-0.03%
Falling after China data, oil prices CL00,
-0.74%

BRN00,
-0.82%
TMUBMUSD10Y Treasury yields declined, while TMUBMUSD10Y yields fell,
2.931%

TMUBMUSD02Y,
2.607%
Flat to weaker. DXY dollar,
-0.18%
and gold GC00,
-0.16%
lower, bitcoin BTCUSD,
-3.55%
Weaker, trading at just under $30K with most cryptocurrencies under moderate pressure.

Read: Crypto investor Barry Silbert offers sympathy and advice to those who lost their fortunes last week

Indications

These were the most searched indicators on MarketWatch as of 6AM ET:

random readings

Top Goldman Sachs Bankers Asked To Take All The Vacation They Want

A cove has reopened on the Thai beach made famous by Leonardo DiCaprio. But you may not be visiting anytime soon.

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