Former chief US strategist at Goldman Sachs, Abby Joseph Cohen, says the stock market is primed to face headwinds that could limit further growth.
In a CNBC interview, Cohen says the economic growth in the US has slowed down, and this could negatively impact the stock market.
“I think right now the bigger concern is that things have slowed down. We see it in the jobs numbers, we see it in the consumption data as well.
And the other place we see it that many people are not talking about is business investment. We basically see that investment in equipment, investment in other categories related to [artificial intelligence] AI has slowed. Now they’ve slowed from torrid levels. So, you couldn’t expect those rates of growth to continue, but there has, in fact, been a slowdown.
And in the second half of the year, we may see GDP numbers that are closer to 1.5% rather than 3%.”
According to Cohen, US “stocks in general are fully priced in” except for a few sectors.
“And I think that for some sectors of the US market, the good news is already priced in. There’s some sectors where it’s not fully priced, but clearly at these levels, which we are all enjoying in the market, there’s less margin for error, if things don’t go quite as well as the consensus expects. So, for example, …if inflation numbers do start to tick up or if the labor data becomes less comfortable than it is right now, that could be a problem.”
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