Here’s where Goldman Sachs predicts the stock market will bottom out

March 16, 2020, 6:07 PM UTC

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Goldman Sachs says we haven’t seen the bottom yet.

The firm said Friday that the S&P 500 could see a mid-year trough at 2,000—that’s down around 20% from current levels and 41% from its all-time high. Goldman says it is using the Fed model, a Dividend Discount Model, and history to come to that bottom—and has already cut its EPS forecast twice in two weeks (the firm is now forecasting S&P 500 EPS will decline by 5%) .

For those like Randy Frederick, the vice president of trading and derivatives at Charles Schwab, markets could easily test the lows from December of 2018, which is 2,351 on the S&P. “We got relatively close [on Monday] but we didn’t get there,” Frederick tells Fortune. But given that the S&P 500 hit around 2,400 in intraday trading on Monday, it’s likely the index might test that support level soon—”50 points could evaporate in five minutes in this market,” he says.

An emergency Fed rate cut on Sunday that whittled interest rates effectively down to zero seemingly had no impact on investor sentiment, as stocks plunged over 7% right at the bell, triggering yet another circuit breaker.

But Goldman is by no means alone in seeing a steeper drop on the horizon. Chris Zaccarelli, chief investment officer for Independent Advisor Alliance, notes the trajectory is clear: “In the absence of more clarity, the market’s natural direction will be down,” Zaccarelli said in a note. “However, I would expect sharp bounce backs whenever fiscal stimulus and/or more positive Covid-19 news develops.”

The message for investors this week? Don’t “become their portfolio’s worst enemy by locking in these declines by selling out,” CFRA’s Sam Stovall suggests in a note.

That rings true for’s chief financial analyst Greg McBride: “Despite fear and uncertainty, investors should think to the future, beyond the economic pause and when business and life resumes normalcy,” he said in a note. “Thinking 5, 10 years down the road could prevent that regrettable knee-jerk selling reaction and reveal potential buying opportunities.”

Many investors were not taking that message to heart on Monday, however, as the Dow and S&P 500 both plunged more than 11% in intraday trading.

Still, Charles Schwab’s Frederick thinks the worst may be yet to come. Because the market plunge has been so fast (and the spread of coronavirus so rapid), we haven’t seen much impact on economic data—yet. Frederick points to the Empire State manufacturing index data released Monday, which saw a record 34.4 point drop, coming in at negative 21.5 in March—that’s not only way off estimates of a 4.8 reading, but is also the lowest level since 2009. Frederick says it’s “inevitable we’re going to see some serious deterioration in all the data over the next few weeks.”

But all hope is not lost. Goldman maintains the S&P 500 could likely end the year back up at 3,200 points—which would represent a roughly 27% increase from current levels.

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