http://www.zerohedge.com/news/2016-02-21/after-blowing-its-clients-its-top-6-trades-2016-goldman-has-new-trade-recommendation
The consensus is the the US is not and has no chance of entering a recession. Until now. Goldman hedges that if it were to pass the metrics are :
1. for every 1 % change in GDP the eps of the sp 500 changes by $5
2. a normalized estimate of $111 eps at - 1 % gdp equals $106
3. a 1% shange in interest rates effects financial sector EPS by 4%
4. a $10 change in the price of oil has a 29% impact on energy earnings or $1 EPS sp 500
5. 13 recessions since 1937, peak to trough -20 % earnings and the median projects sp 1680 -12% from today this time
6. 18-24% probability of recession in the next 2 years
7. 2008-9 - 57 % eps so thinking at least - 24% from here roughly 1500 sp
8. the magic of the multiple is held constant at 18 (16 for distressed environments)
9. at a range of $100 - $120 sp eps at 18 conveniently equals a base of sp 1800
10. clinically a 15 mutliple at $100 is goldmans worst, worst case
11. either way targets are just lower and that before the carnage of the VIP basket
The consensus is the the US is not and has no chance of entering a recession. Until now. Goldman hedges that if it were to pass the metrics are :
1. for every 1 % change in GDP the eps of the sp 500 changes by $5
2. a normalized estimate of $111 eps at - 1 % gdp equals $106
3. a 1% shange in interest rates effects financial sector EPS by 4%
4. a $10 change in the price of oil has a 29% impact on energy earnings or $1 EPS sp 500
5. 13 recessions since 1937, peak to trough -20 % earnings and the median projects sp 1680 -12% from today this time
6. 18-24% probability of recession in the next 2 years
7. 2008-9 - 57 % eps so thinking at least - 24% from here roughly 1500 sp
8. the magic of the multiple is held constant at 18 (16 for distressed environments)
9. at a range of $100 - $120 sp eps at 18 conveniently equals a base of sp 1800
10. clinically a 15 mutliple at $100 is goldmans worst, worst case
11. either way targets are just lower and that before the carnage of the VIP basket
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