Abby Joseph Cohen, the most bullish investment strategist on Wall Street this year, will stop making Standard & Poor's 500 Index forecasts for Goldman Sachs Group Inc.Darn, those forecasts were always entertaining, and most often contrarian.
She was succeeded in the role by David Kostin, Goldman's U.S. investment strategist, spokesman Ed Canaday said in a telephone interview. Kostin today predicted the S&P 500 may fall 10 percent to 1,160 before rebounding to 1,380 by year's end. Cohen, as chief investment strategist, last predicted the benchmark for American equities would end 2008 at 1,675, representing a 32 percent rally from its current level.
The 56-year-old Cohen now has the title "senior investment strategist" and contributor to the portfolio strategy team, according to Canaday. Her prediction for the S&P 500 this year was the highest among 14 Wall Street forecasters followed by Bloomberg.
"She will continue to meet with our clients around the world and provide commentary on financial markets focusing more on longer-term market activity," Canaday said in an e-mailed statement.
Flashback October 9, 1998
A Volatile Day Turns Wall St. To Uneasy St.
Over the last six weeks, investors have held onto the hope that the United States might be able to avoid the full effect of the economic downturn that has struck so many far-flung parts of the world. And while the financial markets remain in turmoil, many investors thought that the prices of stocks, bonds and other financial assets had largely taken the bad news into account.Professor Jason Goepfert on Minyanville noted "October 8, 1998 was the day the market bottomed during the last financial-led scare. Just a not-so-amusing anecdote on this anxious day."
Those illusions cracked yesterday as the value of the dollar fell further, the bond market dropped and the prices of hundreds of stocks plunged even as the main stock market gauges showed minimal losses. One after another, the pilings that have lent a measure of stability to the markets over the last several weeks have been swept away.
Two influential American analysts adjusted their outlooks yesterday, further adding to the gloom. Abby Joseph Cohen, the investment analyst at Goldman, Sachs & Company who has been the market's most voluble cheerleader over the last three years, made comments about corporate earnings growth that to many listeners had a slightly negative tone.
If Ms. Cohen did not throw in the towel on her relentlessly optimistic forecast, she at least threw in a washcloth, cutting her estimates of 1998 and 1999 earnings for the companies in the Standard & Poor's 500-stock index, implying that the current economic squeeze will extend well into next year.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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