Goldman says there are three large inventory consumers that can preserve the file rally going

The S&P 500 surged to a brand new all-time excessive on Monday, and Goldman Sachs says the bull market will carry on rolling into 2020 on the again of three large consumers: companies, overseas buyers and US households.

Firms will spend $470 billion on shares subsequent 12 months, with overseas buyers and US households contributing $50 billion and $30 billion respectively, the agency discovered.

Whereas international progress fears and heightened valuations slowed the S&P’s march to a brand new all-time excessive, Goldman says the backdrop heading into 2020 stays favorable for shares.

“Constructive fairness market returns, rising rates of interest, and stabilizing US and World GDP progress ought to assist already-elevated fairness exposures,” Goldman Sachs analysts led by David Kostin mentioned in a report.

Companies will symbolize the “largest supply of U.S. fairness demand” subsequent 12 months as buyback spending continues and acquisitions choose up.

Goldman expects corporations to spend $470 billion via share repurchase applications and M&A spending. Backside-line progress is accelerating — 6% in 2020 vs. 3% on this 12 months in accordance the agency’s estimates — which “ought to assist elevated spending on M&A.”

Inside the 11 S&P sectors, the agency anticipates buyback spending would be the highest amongst expertise corporations, adopted by vitality and utilities corporations.

Goldman did observe, nevertheless, that the $470 billion…