Tag Archives: Goldman

A recessionary storm could be forming off into the distance amid a host of inflationary and geopolitical concerns, warns strategists at Goldman Sachs. “We now see the risk that the U.S. enters a recession during the next year as broadly in line with the 20-35% odds currently implied by models based on the slope of the yield curve,” said Goldman Sachs Chief Economist Jan Hatzius. The top Wall Street strategist cut his 2022 U.S. GDP forecast to a growth of 1.75% from 2% previously. Consensus… Source link

The Federal Reserve is unlikely to back off raising interest rates starting at its March meeting as it wrestles with trying to fight red-hot inflation against the backdrop of Russia invading Ukraine. “The current situation is different from past episodes when geopolitical events led the Fed to delay tightening or ease because inflation risk has created a stronger and more urgent reason for the Fed to tighten today than existed in past episodes,” said Goldman Sachs Chief Economist Jan Hatzius… Source link

A version of this post was originally published on TKer.co. Let’s talk about the CAPE ratio. It’s one of the most widely-followed stock market valuation and investing metrics. It’s being talked about more as investors wonder whether stocks are poised to lose ground in 2022. Unfortunately, the signal of doom it supposedly sends is a myth. CAPE, or cyclically adjusted price-earnings, was popularized by Nobel prize-winning economist Robert Shiller. It’s calculated by taking the price of… Source link

Brace for a heavy dose of interest rate hikes out of the Federal Reserve, warns strategists at Goldman Sachs.  “Our economists expect the Fed will begin its hiking cycle at the March meeting and hike a total of four times in 2022. They expect an additional three hikes in 2023 and three hikes in 2024. The market is currently pricing a similar pace of tightening in 2022 but expects fewer total hikes this cycle,” said Goldman Sachs strategist Ben Snider in a research note on… Source link

A strong year of performance for chip stocks in 2021 amid major pandemic-driven shortages isn’t causing Goldman Sachs to back off key trades in the red-hot sector.  Analyst Toshiya Hari revealed Monday in a new research note eight names in the chip space that are top picks for the investment bank: Advanced Micro Devices, Marvell, Analog Devices, Teradyne, Impinj, Micron, ON Semiconductor and Qorvo. Hari warns, however, that stock selection in chips will take on greater importance this year… Source link

The fast-spreading Omicron variant isn’t shaking the confidence (yet) on Goldman Sachs’ call for double-digit percentage returns for the S&P 500 next year.  Goldman’s chief U.S. equity strategist David Kostin reiterated Monday an S&P 500 target by the end of 2022 of 5,100. The figure marks a potential 12% increase in stock prices as measured from the S&P 500’s current level.  “We expect that these gains will be driven primarily by earnings per share growth of 8% combined with a stable P/E… Source link

Rally on despite markets being powered to records by a handful of very large stocks, says David Kostin, Goldman Sachs chief U.S. equity strategist. Goldman’s research shows that five stocks have accounted for 51% of the S&P 500’s return since the end of April. Those five stocks — Microsoft, Google, Apple, Nvidia and Tesla — account for more than one-third of the S&P 500s 26% return this year. While this has unfolded among these household name tech giants, Kostin points to narrowing… Source link

Oil prices have come down way too fast on Omicron variant concerns, says Goldman Sachs oil strategist Damien Courvalin. In fact, the price correction is borderline comical, per Courvalin’s calculations.  “The lack of discretionary buying activity in the face of an uncertain new COVID variant has therefore left prices in free-fall and pricing in a dire demand outlook. We estimate based on our pricing model, that the market has now priced in a mammoth c.7 mb/d [millions of barrels per day]… Source link

The bull market of 2021 may be on temporary hold as investors assess the economic risk from the new Omicron variant of COVID-19, warns Goldman Sachs. “We think a broad risk recovery may be impeded in the near term by the need to digest the prospect of a more hawkish Fed and a less consistent cyclical tailwind. Ironically, the Omicron scare itself may now create the best possibilities for relief in the coming weeks, either because incoming news is better than feared or because it prompts… Source link

Not every sector of the market is a longer-term buy even with stocks continuing to be on autopilot, warn strategists at Goldman Sachs.  Some of the worst stocks to own in a U.S. economy trying to claw back from the COVID-19 pandemic are those with high exposure to tight labor markets, which runs the risk of pressuring profit margins as wages are hiked. “Labor market tightness will remain a challenge during the next few years. Investors should avoid stocks with high labor costs relative to… Source link