July 30 (UPI) -- Investment house Goldman Sachs issued its projections for the S&P 500 index next year, and it calls for more double-digit growth -- even though it's lowered some estimates due to sluggish economic expansion.
The bank's outlook predicts a growth to 3,400 for the index by the end of 2020, a gain of 10 percent over its projected finish this year. Goldman Sachs also updated its outlook for the rest of 2019, predicting 3,100 by the end of December.
The new year-end estimate would mean a 3 percent appreciation and a full-year gain of 24 percent. The S&P measures the performance of 500 large companies that list on the New York Stock Exchange, Nasdaq and Cboe BZX Exchange.
Goldman based part of its prediction on an expected interest rate cut from the Federal Reserve, which began its two-day policy meeting Tuesday. Some analysts expect the Fed to announce a rate cut Wednesday.
"The dovish Fed pivot has driven the equity market rally in 2019, and we expect low interest rates will continue to support above-average valuations going forward," David Kostin, Goldman's chief U.S. equity strategist, wrote in a note to clients.
The overall forecast projects a decade-long bull run into another year, as Goldman expects global growth to rebound modestly next year.
A research note showed Goldman lowered its 2019 earnings-per-share estimate for the index by $6 to $167, CNBC reported.
As of Tuesday, however, the S&P 500 has failed to substantially advance beyond the 3,000-mark, where it's been several times since January. The index closed at 3,026 Friday and was at 3,010 by Tuesday afternoon.
"We think this latest surge will fail again," said Mike Wilson, chief investment officer at Morgan Stanley, this week. "We don't expect a Fed cut to rekindle growth the way market participants may be hoping, and now pricing."