the sector’s dominant constituents, are facing antitrust investigations and Goldman said the risks will rise in the 367 days until the public go to the polls.
“Although the growth prospects of many communication services companies remain attractive, the valuation overhang from regulatory uncertainty will likely continue to grow and weigh on the sector’s performance,” analyst David Kostin said.
In a note, Goldman Sachs said antitrust lawsuits against IBM
n 1998 had all hit the companies’ sales growth and valuation.
Elsewhere the note said most equity investors had focused on Elizabeth Warren’s rising prospects and the potential consequences of her policies.
Most notably managed health care stocks have declined as Warren’s popularity has risen, Goldman said, due to her “Medicare for All” proposals.
Kostin said the winning candidate would still need the support of both chambers of Congress for policies discussed on the campaign trail to be implemented and urged investors to look at the probability of outcomes.
He added: “Based on our earnings and valuation sensitivities, the current state of the race implies a probability-weighted year-end 2020 S&P 500 level of roughly 3,200.”
and Chinese e-commerce giant Alibaba all report third quarter results ahead of the open.
Colgate-Palmolive beat profit expectations but sales fell short in the third quarter, sending the stock 1.3% lower in pre-market trading, while Exxon’s earnings topped analysts forecasts, boosting shares.
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