Goldman Sachs predicts that the U.S. economic recovery will be in full swing in 2021 with GDP expanding 5.9% and the S&P 500 climbing 14.5%.

While slowing from 16% in 2020, it would still be well above the average 8% growth rate since 1930.

In a Jan. 4 note, David Kostin, Goldman Sachs' chief U.S. equity strategist, and his team forecast "widespread" COVID-19 vaccinations in 2021, continued low interest rates, and S&P 500 EPS of $175, a 29% increase from 2020 and a 6% increase from pre-pandemic profits in 2019.

Kostin forecasts consumer discretionary EPS to see the largest jump in 2021 by percentage, climbing 97% from 2020 to $14 in 2021, followed by industrials EPS, which is forecast to rise 89% to $14, and materials, forecast to climb 37% to $5.

The S&P 500 settled at a record high on New Year's Eve, gaining 18.4% for 2020 on a total-return basis.

The S&P 500's information technology sector, which includes Apple Inc. and Microsoft Corp., surged 43.9% on the year, the most of any sector. Consumer discretionary stocks, a category that includes Amazon.com Inc., saw a 33.3% gain.

Goldman recommends being overweight information technology, healthcare, materials and industrials stocks, and being underweight communication services, consumer staples, utilities and real estate.