the jambalaya

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




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