Goldman Sachs’ bear market prediction metric is at 73 percent, the highest level since the late 1960s and early 1970s, according to a CNBC.com article. The elevated level has historically signaled a zero-average return over the ensuing 12 months and a “substantial” risk of drawdown, the article reports. The indicator considers the unemployment rate, manufacturing data, core inflation, the yield curve and share valuations. According to Goldman chief global equity strategist Peter Oppenheimer, “Historically, when… Read More
Goldman Sachs Asset Management is betting on the worst-performing emerging markets by buying up Turkish and Argentinian government debt, according to an article in Bloomberg. The article reports that the firm “has taken an overweight position in the nation’s dollar bonds” based on the rationale that the notes have been “decimated” by investors “fleeing a rout in emerging markets.” Goldman’s head of fixed income (Asia-Pacific) Philip Moffitt, said that in places like Turkey, “where the… Read More
Strategists at Goldman Sachs say that U.S. investment-grade debt has trailed equities for a month and has been “behaving in a way that portended the last big equity shakeup,” according to a recent article in Bloomberg. Similar to earlier in the year, credit has trailed equity (when measured relative to volatility) while tech stocks have set records. In a recent note, the strategists wrote, “In early January, modest widening in credit contrasted sharply with a rapid… Read More
The current environment in which stocks, bonds and credit have been expensive at the same time—a situation last seen in the 1920’s and 1950’s–will eventually bring “pain for investors,” according to Goldman Sachs Group Inc. This according to a recent Bloomberg article. In a recent note, Goldman argues that the slowdown in quantitative easing is “pushing up the premiums investors demand to hold longer-dated bonds” which will suppress returns over the medium term. Another possibility,… Read More
When quantitative equity funds experienced a meltdown ten years ago, Goldman Sachs (among the hardest hit) “began to rebuild the strategies with less leverage and more diversity,” according to a recent Bloomberg article. “A decade later,” the article says, “the quant unit has clawed itself back to respectability,” and now manages about $110 billion. But the team faces stiff competition, “with almost every asset manager chasing quant money, betting on similar factors and shaving fees… Read More
Even though their post-election surge has recently cooled, both small- and mid-cap equities remain well-poised in today’s market environment, according to two portfolio managers at Goldman Sachs in a recent Barron’s article. The authors outline the following supporting factors: President Trump’s’ agenda could “benefit small- and mid-cap companies disproportionately” since a large portion of their revenues come from domestic operations. Corporate tax reform could also have a bigger impact on smaller companies. The post-election surge… Read More
An analysis of professionally managed investment portfolios revealed to a team of Goldman strategists that “many investors are missing important potential sources of return as a result of putting too many of their “risk” eggs in one basket—U.S. equities.” This according to a recent article in Barron’s. The article argues that many portfolios appear to be overlooking “potentially attractive” opportunities in emerging market, emerging market debt and small-cap equities (in Japan, Europe and other non-U.S.… Read More
Goldman Sachs Chief Equity Strategist David Kostin says an improving economy means investors should look to value stocks.
Goldman Sachs’ Abby Joseph Cohen says the improving economy makes for a bullish outlook for equities. Cohen tells Bloomberg Surveillance that with the economy growing at about 3% and corporate earnings growing in the high single digits, she thinks the S&P 500’s fair value will be about 2150 a year from now.
In a new report, Goldman Sachs says that stocks are as attractive compared to bonds as they’ve been at any time in the last generation, and that investors would be wise to shun bonds and focus on equities. “Given current valuations, we think it’s time to say a ‘long good bye’ to bonds, and embrace the ’long good buy’ for equities as we expect them to embark on an upward trend over the next few… Read More