Corporations, foreign investors and U.S. households are the three big market forces which could continue to drive demand for U.S. equities.
Corporations, foreign investors and U.S. households are the three big market forces which will continue to drive demand for U.S. equities into 2020, Goldman Sachs said.
Companies will spend $470 billion on stocks next year, with foreign investors and US households contributing $50 billion and $30 billion respectively, the firm found. Goldman expects companies to spend $470 billion through share repurchase programs and M&A spending. Bottom-line growth is accelerating — 6% in 2020 vs. 3% in this year according the firm's estimates — which "should support increased spending on M&A."
Economics at the firm are predicting the dollar will weaken by 3% over the next year, which historical data suggests is typically supportive of foreign investment. That said, the ongoing US-China trade war remains a key factor to watch since it could deter Chinese buyers.
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