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☹️ Goldman’s Grim Forecast For The S&P 500

+ Disney will name Bob Iger’s replacement in early 2026

October 21, 2024

Good afternoon! Ferrari has unleashed its first new supercar in over a decade, and the F80 is nothing short of a spectacle. This €3.6 million ($3.9 million) hybrid beast is packing 1200 horsepower and has a top speed of 217 miles per hour. Only 799 units will be made, making it one of Ferrari’s priciest and most exclusive models ever.

With a design inspired by the aerospace industry, the F80 is more than just fast—it’s futuristic. Ferrari’s new "Boost Optimization" system automatically adjusts power output for optimal performance on the track, cementing the F80 as a next-gen powerhouse in the world of supercars.

MARKETS

*Stock data as of market close*

  • Investors are gearing up for a busy week, with over 110 S&P 500 companies, including Tesla and Coca-Cola, set to report earnings. The S&P 500 slipped 0.18% after hitting a fresh all-time high, while the Dow dropped over 300 points. Meanwhile, the Nasdaq managed a 0.27% gain, keeping tech in the green.

  • After a six-week winning streak, the market’s taking a breather. Rising Treasury yields and election buzz are also keeping traders on their toes. Despite the dip, the S&P hasn’t had back-to-back losses in nearly 30 sessions—one of the longest runs since 1928.

STOCKS
Winners & Losers

What’s up 📈

  • Save climbed 53.06% higher Monday morning as the carrier said it extended a deadline for debt refinancing with Visa and Mastercard. ($SAVE)

  • AppLovin jumped 9.39% after Bank of America hiked its price target, citing the company's AI engine transformation. ($APP)

  • Kenvue advanced 5.52% on news that Starboard Value took a large position in the Johnson & Johnson spinoff. ($KVUE)

  • Boeing rose 3.11% after reaching a new contract proposal with its machinists’ union, which could end a month-long strike. ($BA)

  • Grab increased 8.04%. ($GRAB)

  • Nvidia ticked up 4.14%. ($NVDA)

  • Restaurant Brands International gained 3.12%. ($QSR)

What’s down 📉

  • Wayfair fell 9.33%, impacted by rising Treasury yields, as investors grow concerned that the Fed will be slower to cut interest rates. ($W)

  • Cigna slid 4.69% after Bloomberg reported that the insurer reignited merger talks with Humana. ($CI)

  • UPS dropped 3.38% after Barclays downgraded it to underweight, citing multiple near-term challenges. ($UPS)

  • Comcast decreased 3.34%, with attention on its new Epic Universe theme park opening next year, set to compete with Disney. ($CMCSA)

  • Champion Homes dropped 6.45%. ($SKY)

  • Target declined 3.78%. ($TGT)

FORECAST
Goldman Forecasts Just A 3% S&P 500 Annual Return The Next 10 years

Remember those sweet 13% annual returns from the S&P 500?

Well, giddy up because Goldman Sachs is here to rain on the parade. According to their latest forecast, U.S. stocks will deliver a measly 3% annualized return over the next decade. That’s a far cry from the gains of the past ten years, where tech giants like Nvidia and Apple led the charge.

Goldman’s David Kostin and his team crunched the numbers and blamed sky-high valuations and an overly concentrated market.

Right now, a small handful of mega-cap stocks hold the market together, but history shows it’s tough for companies to keep that kind of momentum going. In short, expect a major slowdown.

Bonds, Small Caps, and Equal Weight – Oh My!
So where’s the opportunity? Goldman suggests that bonds might actually outshine stocks in the next ten years—giving them a 72% chance to outperform. The equal-weight S&P 500 is another hot tip, since it spreads the love to smaller players, unlike the current market-weighted index that’s all about the big boys.

Speaking of smaller players, small-cap stocks might be worth a look too—they tend to do well when the market’s top-heavy.

Not Just Goldman’s Gloom
Goldman’s not the only one predicting a bumpy road ahead. JPMorgan is a bit more optimistic, but still expects returns to be less than stellar, projecting about 6% for the next decade.

Both banks agree on one thing: high inflation and inflated valuations are set to hold stocks back. So, if you’ve been banking on those double-digit gains sticking around, it might be time to rethink your strategy.

In a nutshell, the “analysts” think the stock market is cooling off, but that doesn’t mean you can’t find ways to win—you just might need to play it a little differently.

NEWS
Market Movements

  • 📊 Earnings Season Kicks Off with Major Players: This week, 112 S&P 500 companies, including 7 Dow members, will release earnings, with Tesla, Coca-Cola, T-Mobile US, Verizon, and IBM leading the pack.

  • ✈️ Boeing Reaches Tentative Deal to End Strike: Boeing and its machinists union have reached a tentative contract deal after a 5-week strike. The agreement includes a 35% wage increase over four years and enhanced 401(k) benefits. A vote will take place on Wednesday. ($BA)

  • 📊 Robinhood Introduces Margin Trading in the U.K.: Robinhood has launched margin trading in the U.K., following approval from the Financial Conduct Authority, allowing users to borrow funds for trading. ($HOOD)

  • 🤖 Microsoft to Roll Out AI Agents for Routine Tasks: Starting in November, Microsoft customers will be able to create AI agents via Copilot Studio, designed to handle tasks like inventory management and client queries. ($MSFT)

  • ⚖️ Eli Lilly Targets Copycat Weight-Loss Drugs: Eli Lilly has filed lawsuits against medical spas and online vendors selling unauthorized versions of its weight-loss drug Zepbound’s active ingredient, tirzepatide. ($LLY)

  • 🚨 Spirit AeroSystems Faces Furloughs: Spirit AeroSystems is set to furlough 700 workers as a result of Boeing’s strikes. The company also extended its debt refinancing deadline until December. ($SPR)

  • 💊 Sanofi in Talks to Sell Stake in Opella: Sanofi is in exclusive discussions to sell a 50% stake in its consumer-health unit, Opella, to Clayton Dubilier & Rice for $17.39B. ($SNY)

  • 📉 Starboard Value Takes Stake in Kenvue: Activist investor Starboard Value has acquired a significant stake in Kenvue, aiming to boost its underperforming stock post-spin-off from Johnson & Johnson. ($KVUE)

  • 💳 UBS Divests Swisscard Stake to American Express: UBS is selling its 50% stake in Swisscard to American Express as part of its divestment of Credit Suisse assets. ($UBS)

ENTERTAINMENT
Disney will name Bob Iger’s replacement in early 2026

Bob Iger’s retirement saga continues! Disney announced it will name Iger’s successor in early 2026, pushing the date back once again.

While Iger initially planned to hand over the reins by 2024, it seems like the Mouse House isn’t ready to let him go just yet. James Gorman, former Morgan Stanley CEO, will step in as board chairman in January, guiding the search for the next CEO.

This extra time gives Disney more runway to evaluate candidates—both internal and external. But with Iger’s direct reports like ESPN Chairman Jimmy Pitaro and Disney Experiences’ Josh D’Amaro already in the mix, the board has its hands full figuring out who gets to lead one of the world’s biggest entertainment companies.

Enter Gorman: The Succession Whisperer
Disney’s had a rocky road when it comes to CEO handoffs (remember the Bob Chapek debacle?).

Now, with Gorman steering the board’s succession planning, investors are hoping for a smoother ride. Gorman’s experience in pulling off a seamless CEO transition at Morgan Stanley has earned him serious cred, and Disney is banking on that magic to avoid another leadership disaster.

Gorman takes over from Nike Executive Chairman Mark Parker, who’s stepping down after a nine-year stint on the board. Some are saying Gorman’s outsider perspective might finally bring the fresh, independent leadership Disney’s board needs after being so closely tied to Iger for years.

Who’s Next in Line?
Four big names are in the running for Disney’s top job, and they’ve all had their turn in the hot seat. Josh D’Amaro, who oversees Disney’s theme parks and cruise lines, is one of the favorites.

He’s got a solid public profile and is leading the company’s $60 billion park expansion. Meanwhile, Dana Walden has made waves in TV and streaming, but her limited experience in other divisions could hold her back.

Then there’s Jimmy Pitaro, ESPN’s sports king, and Alan Bergman, co-chair of Disney Entertainment, who’s deeply embedded in Hollywood. Of course, there’s always a wildcard—an outside candidate waiting to swoop in.

For now, Disney has plenty of time to decide, but whoever lands the role will have some massive shoes to fill.

Calendar
On The Horizon

Tomorrow

Tomorrow’s one of those unicorn days in the economic world—no big announcements in sight. So take a breather and turn your attention to the real action: earnings season.

Before Market Open:

  • General Motors is cruising through a sales slump like many other automakers, but its stock has stayed in the fast lane this year. Higher profits, tighter cost controls, and a robust dividend and buyback program have kept investors happy. Now, shareholders are eager to hear how GM plans to keep the good times rolling, boost sales, and (fingers crossed) turn a profit in its EV division. The consensus? $2.43 EPS on $44.8 billion in revenue. ($GM)

NEWS
The Daily Rundown

RESOURCES
The Federal Reserve Resource

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