Goldman Sachs like US equities but note it’s a soft data vs. hard data battle

Goldman Sachs says recent market trends indicate growing investor confidence in the economic outlook, as cyclical, growth-linked sectors have been outperforming more defensive, safety-focused stocks.

This rotation reflects optimism around the recovery—but also increases vulnerability if upcoming macroeconomic data disappoint.
The bank noted that while this positioning leaves equities exposed to short-term setbacks, investor sentiment has been buoyed by improving survey-based indicators and supportive policy developments out of Washington.

• “The market continues to gain confidence as a result of improving soft data and friendly policy news from Washington,” Goldman wrote in a note.
• “If the recovery in soft data is sustained, it should support equity returns even as hard data weaken” the strategist added, suggesting that sentiment-driven momentum may continue to carry markets even if tangible economic metrics lag.

As a ps. JP Morgan raised their S&P 500 target back to closing 2025 ‘near 6000’. Analysts at JPM previously had:

• bear-case of ~4,000
• base-case of 5,200
• bull-case of 5,800

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