Corporate profits are stagnating, margins are falling – there is little room for improvement for US stocks that have been spoiled by success. And that’s the best scenario for the markets, says Goldman Sachs equity strategist David Kostin.
Mr. Kostin, something unusual happened on the stock market at the beginning of the year: US stocks underperformed stocks from Europe. What was happening?
DAVID KOSTIN: One of the challenges in the US market is that earnings are flat, but at the same time stocks are quite expensive. However, with high valuations and no earnings growth, it is very difficult to generate a positive return in the US stock market. We therefore assume that European equities will show a higher return in 2023.
Source: Stern
