Salient to Investors:

David Kostin at Goldman Sachs said:

  • The S&P 500 will fall 10 percent in the next 12 months before rebounding to end 2014 at 1,900, end 2015 at 2,100 and end 2016 at 2,200.
  • The overall market should rise because the US economy will be getting better.
  • Buy tech, industrial and consumer discretionary companies as they will benefit the most from an improving economy.
  • Buy shares of companies that are increasing capital spending or repurchasing stock, and companies with above-average operating leverage.

S&P said the 25 months since the S&P 500’s last 10 percent drop is the longest stretch without such a decline since 2007.

Economists expect US economic growth to rise to 2.6 percent in 2014 and 3 percent in 2015 versus 1.7 percent expansion in 2013.

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