Goldman Sachs upgrades global equities investment recommendation
The investment bank updated its three-month outlook in line with developments in corporate earnings and valuations.
US-based investment bank Goldman Sachs has raised its three-month investment recommendation for global equities from neutral to overweight, driven by growth in corporate earnings and attractive valuations.
Change in Investment Recommendation
Goldman Sachs revised its three-month outlook as corporate earnings growth supported markets and valuations became more attractive. With this move, the bank aligned its three-month outlook with its 12-month optimistic expectation.
Risk Factors and Market Conditions
While oil supply concerns in the Middle East drive prices higher, anxieties are growing that inflation and interest rates could remain elevated for a prolonged period. Increasing debt levels of corporations and governments have also triggered sharp sell-offs in global bond markets.
Regional Preferences and Risks
The bank maintained its overweight recommendation for Asian and US stock markets, and its underweight recommendation for European markets. High interest rates and energy prices continue to pose risk factors in the short term.
Strategy and Bond Expectations
Goldman Sachs announced that it favors the Barbell strategy, which combines technology stocks with bond-like characteristics. Additionally, the bank upgraded its 12-month investment recommendation for government bonds to overweight.