LONDON (Reuters) – Goldman Sachs lifted its 2020 S&P 500Â .SPXÂ target to 3,700 points on Wednesday after a much-awaited positive vaccine announcement and Joe Biden’s U.S. election win triggered a rally in global stock markets.
â€œDespite investor focus on the prospective policy implications of the Biden presidency, the vaccine for COVID-19 is a more important determinant of the path of both the economy and stock market in 2021,â€ the U.S. investment bank wrote in a note to clients.
It sees the S&P 500 hitting 4,300 at year-end 2021, a 21% jump from Tuesdayâ€™s closing levels.
In Europe, Goldman expects a strong bounce in profits in 2021 as lockdowns ease and populations start to be vaccinated. It raised its 12-month target for the STOXX 600Â .STOXXÂ to 430 points, an 11% jump from current levels.
Value stocks, typically companies that are more sensitive to economic cycles, have been soaring since Pfizerâ€™s announcement on Monday of positive data from its vaccine trial, raising hopes of an economic recovery.
Goldman also raised its 12-month target for London’s top FTSE 100Â .FTSEÂ share index, which like other European benchmarks is heavy in value stocks, to 7,200 points, a 13% upside from current levels.
â€œWe see the improved macro and commodities environment as supportive going forward,â€ it said, adding that value sectors represent more than a third of the FTSE 100 index.
JPMorgan said on Monday that it expected the S&P 500 to hit 4,000 points by early 2021.