The S&P 500 will be flat and have no earnings growth in 2023, even in a soft-landing scenario with 1% GDP gain, Goldman Sachs strategist says

• Goldman Sachs' chief US equity strategist expects a soft landing with the US economy growing about 1% next year.
• But the S&P 500 will still end up about flat in 2023, David Kostin told Bloomberg TV on Tuesday.

The US economy will grow at roughly a 1% clip next year as it makes a soft landing, according to Goldman Sachs' chief US equity strategist.

But even in this relatively optimistic scenario, David Kostin told Bloomberg TV the S&P 500 will decline roughly 10% before rebounding to end up at around 4,000, which is about where it is today.

"In that scenario you have no earnings growth. That's an optimistic scenario if you will, and you have stable kind of valuation," Kostin said.

In a hard landing scenario, he added, S&P 500 earnings would decline roughly 11%, equating to $200 per share next year, against Goldman's baseline of $224. The hard-landing scenario would also see the S&P 500 decline by 20%.

"Think about that as your downside, maybe 20% lower. Again that's a scenario, not a baseline, but a scenario as opposed to a market falling maybe 10% to 2,600 before ultimately rallying back to 4,000," he said.

Meanwhile, Deutsche Bank analysts published a note on Monday that predicted a mild recession in 2023 with the S&P 500 rallying to 4,500 in the first half of next year, then selling off by more than 25% in the third quarter, before rebounding back to 4,500 by the end of 2023.

Deutsche Bank also sees earnings per share among S&P 500 companies falling to $195 in 2023 from $222 in 2022.