April 1, 2010 United States: Portfolio StrategyGoldman Sachs Global Economics, Commodities and Strategy Research 3
Exhibit 3: The Bottom Line
Our key forecasts for the S&P 500 index, recommended sector positioning and top thematic trade ideas
(a) Sector weightings last rebalanced on 7-Dec-09. (b) US Portfolio Strategy baskets may be found on Bloomberg by typing <GSSU5>. The Bloomberg pageprovides real-time basket performance and current basket constituents. To obtain access to our baskets on Bloomberg, please contact your Goldman Sachssalesperson.Note: The ability to trade this basket will depend upon market conditions, including liquidity and borrow constraints at the time of trade.
Source: Compustat, First Call, I/B/E/S, IDC and Goldman Sachs Global ECS Research.
Equity Basket disclosure
The Equities Division of the firm has previously introduced the basket of securities discussed in this report. The EquityAnalyst may have been consulted as to the composition of the basket prior to its launch; however, the views expressedin this research and its timing were not shared with the Equities Division. Note: The ability to trade this basket willdepend upon market conditions, including liquidity and borrow constraints at the time of trade.
S&P 500 Index Forecasts
2010 year-end price target
7% above current price level of 1169
S&P 500 EPS estimates2008A2009E2010E2011E
GS Portfolio Strategy top-down
$50 $57 $76 $90
Growth (% year/year)
Recommended Sector Positioning
RecommendedGS Overweight / S&P 500Total ReturnGS AlphaS&P 500 SectorPositioningUnderweight (a)Weight2010YTD
300 bp 19% 2% (10)bp
300 11 1 (13)
200 3 3 (4)
0 11 6 0
0 11 13 0
0 16 11 0
(100) 3% (4) 9
(200) 10 10 (10)
(200) 3 (4) 17
(300) 12 3 6S&P 5000 bp 100% 5% (5)bp
Thematic Trade Recommendations
InitiationOur best trade ideas: Portfolio Strategy thematic baskets (b)DateReturn
BUY High Sharpe Ratio Basket (GSTHSHRP); SELL S&P 500
See 2010 Outlook: Cyclical start; defensive finish (7-Dec-09).
8-Dec-09 3.0 %
BUY High Operating Leverage (GSTHOPHI); SELL Low Operating Leverage (GSTHOPLO)
See Macro to Micro Shift Part II: 2H 2009 Update (20-Jul-09).
20-Jul-09 9.4 %
BUY BRICs Sales Basket (GSTHBRIC); SELL S&P 500
See Portfolio Passport: Coming to America (5-Nov-08).
4-May-09 13.5 %