Key Takeaways
- Goldman Sachs (GS) has revised its 12-month target for the pan-European Stoxx 600 index downwards to 570 from a previous forecast of 580, citing concerns over potential tariffs and weaker economic growth.
- Chinese President Xi Jinping outlined a blueprint for development at the Shanghai Cooperation Organization (SCO) Summit in Tianjin, emphasizing multilateralism and opposing "bullying behavior" in the global order.
- China pledged 2 billion yuan ($275 million) in grants to SCO member states for 2025 and proposed establishing an SCO Development Bank to bolster economic cooperation.
In a significant shift in its European market outlook, Goldman Sachs (GS) has lowered its 12-month target for the benchmark Stoxx 600 index to 570 from its earlier projection of 580. This downward revision comes as the firm factors in the increasing likelihood of higher tariffs, anticipated weaker economic growth in both the U.S. and Europe, and potential disruptions to global trade. The investment bank's analysts also adjusted their expectations for European earnings per share, now forecasting a 2% growth in 2025 and 4% in 2026, a reduction from prior forecasts.
Concurrently, Chinese President Xi Jinping addressed the Shanghai Cooperation Organization (SCO) Summit in Tianjin, outlining a comprehensive blueprint for development for the regional bloc. Speaking at the plenary session, President Xi called on leaders to "adhere to fairness and justice and work together to oppose Cold War mentality, camp confrontation, and bullying behaviour" amidst global turbulence and transformation. The summit, which commenced on August 31, 2025, brought together leaders from 10 member states, including Russia and India, along with numerous observer states and dialogue partners.
To further bolster cooperation and development within the SCO, President Xi announced China's commitment of 2 billion yuan ($275 million) in grants to member states for 2025. He also proposed the establishment of an SCO Development Bank to underpin security and economic collaboration among the member states. President Xi highlighted China's deepening economic ties with the grouping, noting that cumulative trade with SCO countries has surpassed $2.3 trillion, with Chinese investments exceeding $84 billion. The summit aims to approve a development strategy for the SCO for the next 10 years and adopt a series of outcome documents focused on strengthening security, economic, people-to-people, and cultural cooperation.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.