Goldman believes the rate cut will not save the markets

If any fall in interest rates on the part of the Fed, it is unlikely to lead to a sharp rise in the shares, Goldman Sachs strategists say.

David Kostin believes that the markets have already exhausted the upward movement, attributing 90% of the rally because of the many times of expansion in the economy. Markets are now expecting the Fed to cut interest rates by the end of this month, but Kostin believes that even if it does happen, it will hardly impress the market players. He does not expect the Fed to provide any more information about its monetary policy that would trigger a new rally in the stock.

If there is a change in their mood, however, markets will need to re-grind the information, and this process will take weeks.

Meanwhile, investors will look for additional signs from the Fed around interest rates and the state of the economy today, when Powell will have a conference at the US Congress. Goldman predicts two Fed interest rate cuts this year because of the Fed's inability to run markets.

Because of that, Kostin remains with his S & P 500 target of 3,000 by the end of the year.

On the other hand, if the US and China manage to reach a deal, it could also boost markets. But Kostin does not expect this to happen soon.

Source: CNBC

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