US stocks gain but Japanese stocks may be better buy

US stocks rose on Monday.

The S&P 500 gained 0.5 percent to 2,102.44 as a report on Monday showed that the National Association of Home Builders/Wells Fargo housing market index rose to 61 in August, the highest since November 2005, from 60 in the previous two months.

However, longer term, there may be little upside potential left for US stocks, according to Goldman Sachs.

Goldman thinks that the S&P 500 will end the year at 2,100, about the same as Monday's close. Its 12-month target for the S&P 500 is 2150, about a three percent gain from current levels, and its target for 2017 is 2300, about a 10 percent gain from current levels.

Indeed, some analysts think that Japanese stocks have greater potential than US stocks. From Bloomberg:

Investors in American stocks face the likelihood the Federal Reserve will tighten policy next month. The Standard & Poor’s 500 Index commands a valuation premium to the Topix even though it has one of the lowest returns this year among developed equity markets. BlackRock and Baring Asset say buying Japan and selling U.S. shares is the only logical conclusion.