Goldman Sachs Bets on 'Rising Stocks and Bullish Bonds': S&P 500 Targeted at 8,700 Points, 10-Year US Treasury Yield Falls to 4.5%

According to information from Zhihong Finance APP, Goldman Sachs expects the S&P 500 Index to rise by 13.7% over the next 12 months, and the yield on the 10-year US Treasury note to decrease from the current 5% to 4.5%. The bank has set a 12-month target of 8,700 points for the S&P 500, higher than the current 7,651 points. Goldman Sachs forecasts the index to reach 8,000 points in three months and 8,300 points in six months, representing increases of 4.6% and 8.5%, respectively.

The forecasts also indicate that other major stock markets will rise. Goldman Sachs predicts that the STOXX Europe 600 Index will climb from the current 635 points to 695 points in 12 months, an increase of 9.4%.

The MSCI Asia Pacific (excluding Japan) Index is expected to surge from 880 points to 1,120 points, a rise of 27.2%, while the Tokyo Stock Exchange Index in Japan is forecast to advance from 4,091 points to 4,600 points, up 12.4%.

Goldman Sachs states that US Treasury yields are expected to trend lower over the same period. The 10-year US Treasury yield is projected to be 4.8% in three months, 4.7% in six months, and reach 4.5% in 12 months, down 54 basis points from the current 5%.

The yield on Germany's 10-year government bond is expected to fall from 3.5% to 3.3%, while Japan's 10-year government bond yield is forecast to reach 3% in three and six months from the current 2.9%, then drop back to 2.9% in 12 months.

The bank's currency forecasts show the Japanese yen will strengthen against the US dollar, while the euro and the pound will weaken versus the dollar. The euro is expected to fall from the current 1.15 to 1.12 against the dollar in 12 months, and the pound is forecast to drop from 1.34 to 1.28. The dollar is projected to strengthen against the yen from 157 to 165, representing an increase of 5.2%.

Goldman Sachs also says it expects commodity prices to diverge. Gold is forecast to rise from the current $4,352/ounce to $5,140/ounce in 12 months, an increase of 18.1%. Brent crude oil is expected to decrease from $103.9/barrel to $78/barrel, NYMEX natural gas is predicted to fall from $2.90/million BTU to $2.75, and LME copper is projected to decline from the current $14,543/ton to $13,800/ton.