Daily Synopsis of the New York market close

Goldman Sachs Joins Morgan Stanley in S&P 500 Target of 6,500 by 2025

Goldman Sachs has set a year-end 2025 target of 6,500 for the S&P 500, projecting a 10.3% increase from its recent close of 5,893.62. This forecast aligns with Morgan Stanley’s outlook, which anticipates strong U.S. economic growth and robust corporate earnings. Both firms expect the Federal Reserve to cut interest rates, further supporting business expansion.

Goldman highlighted the ‘Magnificent 7’—Amazon, Apple, Alphabet, Meta, Microsoft, Nvidia, and Tesla—as key drivers of growth, though their outperformance margin will narrow to the lowest level in seven years. The bank also foresees a potential 11% growth in corporate earnings and 2.5% real GDP growth by 2025, while cautioning about risks from higher bond yields and tariff policies under the newly re-elected Trump administration.

Chinese Courier SF Holding Aims to Raise $793 Million in Hong Kong Listing

SF Holding, China’s largest express-delivery company, is looking to raise up to HK$6.2 billion ($793 million) through a Hong Kong listing, offering 170 million shares at HK$32.30 to HK$36.30 each. The share sale, expected to close on November 27, offers a roughly 29% discount to its Shenzhen-listed stock. SF Holding has already secured $205 million from cornerstone investors, including Xiaomi and Oaktree Capital.

Despite a slight recovery in Chinese investor sentiment after government stimulus measures, volatility persists amid ongoing U.S.-China trade tensions. Hong Kong IPOs have raised over $9 billion in 2024, yet the total remains below historical highs.

China Restricts Local Funds from Buying LGFV Bonds via Hong Kong Link

China has directed domestic investors to halt purchases of offshore yuan bonds issued by local government financing vehicles (LGFVs) through the Bond Connect program with Hong Kong, according to sources. The move comes as part of Beijing’s efforts to mitigate risks from the heavily indebted LGFV sector, which borrowed extensively during past infrastructure booms. This follows a recent $1.4 trillion debt swap initiative aimed at reducing “hidden” local government debt.

Local governments, hit by falling land sale revenues due to China’s property market crisis, are grappling with debt servicing challenges. LGFVs have been major issuers in the dim sum bond market, which has seen record issuance in 2024. The average coupon for LGFV dim sum bonds this year is 5.8%, significantly higher than their onshore equivalents.

Delivery Hero Aims to Raise $1.5 Billion from Talabat’s Dubai IPO

Delivery Hero SE is targeting up to $1.5 billion through an IPO of its Middle Eastern unit, Talabat, in what could be one of 2024’s largest deals in the region. The company is offering a 15% stake, or 3.49 billion shares, at a price range of 1.50 to 1.60 dirhams each. The offering values Talabat at up to $10.2 billion, just below Delivery Hero’s $11 billion market cap. Major investors, including the UAE Strategic Investment Fund and Abu Dhabi Pension Fund, will contribute $250 million as cornerstone investors.