Goldman: Value Investing Still Alive, with This Twist

A recent CNBC article reports that, according to Goldman Sachs, there’s still life left in a value investing strategy, especially with the Fed set to cut rates again.  Goldman says that value stocks are poised for a comeback, adding that the valuation gap between expensive and cheap stocks is the widest it’s been in nine years. The article offers insights from the firm’s chief U.S. equity strategist David Kostin, who said in a recent note,… Read More

Goldman Sachs Says Economy May Have Hit Bottom

The chief economist for Goldman Sachs Group Inc., Jan Hatzius, believes that the global economy may have already bottomed out, according to recent article in Bloomberg. In a recent note, Hatzius and colleague Sven Jari Stehn wrote, “some green shoots are emerging that suggest that sequential growth will pick up from here,” adding that Goldman expects: upside on risk assets, albeit probably at lower levels as “markets have become ‘more sanguine on recession;’ “ bond… Read More

Goldman’s Bear Market Indicator Signaling Zero Returns Over Coming 12 Months

Goldman Sachs’ bear market prediction metric is at 73 percent, the highest level since the late 1960s and early 1970s, according to a 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 Buying Turkey and Argentina Debt

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

Goldman: Stocks May Be Hearing Credit Warning Bell

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

Goldman Sachs: High Valuations Mean Pain is Coming

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

Goldman’s Rebuilt Quant Approach

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

Environment Could Be Ripe for Small- and Mid-Cap Stocks

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

Goldman: Fund Managers Relying Too Heavily on U.S. Stocks

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