A Market Divided: Goldman Sachs' Kostin on the Growing Gap Between Stock Winners and Laggards

Goldman Sachs Chief U.S. Equity Strategist David Kostin notes that despite the S&P 500's 8% rise this year, the dispersion within the equity market has been extremely high, leading to a "market of haves vs. have-nots." Kostin argues that the gap between stock market winners and the rest of the major indexes has grown significantly.

Goldman Sachs Chief U.S. Equity Strategist David Kostin has sounded a cautionary note about the current state of the equity market. In a recent report titled "The outlook for Quality in a market of haves vs. have-nots," Kostin observed that despite the S&P 500's 8% rise this year, the dispersion within the equity market has been extremely high [1]. This disparity has led to a "market of haves vs. have-nots," where certain sectors and stock types have significantly outperformed others.

Kostin noted that the median stock in the S&P 500 is 12% below its one-year high, indicating that many stocks have not participated in the broader market's gains. Instead, Wall Street has favored artificial intelligence, large-cap, and industrial stocks, while avoiding defensives and small-caps. This trend has created a stark divide between the winners and the rest of the market.

The report also highlighted the performance of ExxonMobil (NYSE:XOM), which has maintained a Neutral rating at Goldman Sachs with a price target of $117.00. Despite the current price of $106.80, the stock is seen as undervalued with a P/E ratio of 15.1x and a solid 3.74% dividend yield. ExxonMobil's financial health score is rated as "GOOD" by InvestingPro, with low price volatility and a 42-year streak of consecutive dividend increases, suggesting resilience during economic uncertainty [2].

In contrast, the paper manufacturer Sylvamo (SLVM) has been given an Underperform rating by Goldman Sachs due to relative upside and risks, along with challenges in the paper/pulp sector and global economy [2].

The market's recent performance has been mixed, with stocks surging on Friday as major indexes reached record-high levels. The tech-heavy Nasdaq Composite (IXIC) and the S&P 500 (SPX) both posted significant gains, while the Dow Jones Industrial Average (DJI) also made progress. However, the market's performance remains volatile, with gold futures rallying to record-high levels this week as investors sought a safe haven [3].

In summary, while the S&P 500 has seen significant gains this year, the dispersion within the equity market has been high, leading to a "market of haves vs. have-nots." Investors should remain cautious and closely monitor the performance of various sectors and stock types as the market continues to evolve.

References:
[1] https://www.barrons.com/livecoverage/stock-market-news-today-080825/card/goldman-s-kostin-a-market-of-haves-vs-have-nots--lYrU0mQO0WGXpAY5lKWM?modCode=hp_LEDE_C_LC_1
[2] https://www.investing.com/news/analyst-ratings/exxonmobil-stock-maintains-neutral-rating-at-goldman-sachs-93CH-4181535
[3] https://www.investopedia.com/dow-jones-today-08082025-11787424