Goldman’s Oppenheimer Sees U.S. Stock Rally Running Out of Steam By Bloomberg


© Reuters Goldman’s Oppenheimer Sees U.S. Stock Rally Running Out of Steam

(Bloomberg) — The rebound in equities may not have much further to go, strategists at Goldman Sachs Group Inc and UBS Global Wealth Management warned on Thursday, as markets in Europe and the U.S. are set to end their first month in the green for this year.

“To be clear, we see little upside now in the shorter term,” Goldman Sachs strategists led by Peter Oppenheimer wrote in a note. Mark Haefele, chief investment officer at UBS GWM, concurred, saying “our base case now is for only modest upside for stocks.” 

Both Goldman and UBS GWM have a year-end target of 4,700 index points for the , less than 2% higher from current levels for the U.S. benchmark. They also both see the gauge dropping by around 22% to 3,600 index points in a downside scenario. 

While developed markets have recouped the losses seen after Russia invaded Ukraine, they are still below their January records. The lackluster performance follows a strong rally on the back of a post-pandemic economic rebound that saw major indexes climb to successive highs. 

UBS GWM said its cautious view “partly reflects risks to corporate profits,” while Goldman’s team said “client conversations reveal a notable lack of conviction or enthusiasm for U.S. equities at current valuation levels,” citing a “slowing economy and rising rate environment.” 

Generali Investments echoed the pessimism: “We see little value in chasing the March equity market rebound at this level of valuation,” the firm said in its quarterly outlook. “The sharp fall in equity volatility relative to bond volatility is not sustainable.”

Still, while the rally may be running out of steam, both Goldman and UBS GWM see opportunities for investors, with the latter recommending a focus on energy, food, data, and climate — areas which are set to benefit from a renewed focus on security and stability in the aftermath of the war.

For Goldman’s team, instead of playing specific styles such as growth versus value stocks, investors must look for individual companies “that can innovate, disrupt, enable and adapt” and focus on margins.

©2022 Bloomberg L.P.

 

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



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© Reuters Goldman’s Oppenheimer Sees U.S. Stock Rally Running Out of Steam

(Bloomberg) — The rebound in equities may not have much further to go, strategists at Goldman Sachs Group Inc and UBS Global Wealth Management warned on Thursday, as markets in Europe and the U.S. are set to end their first month in the green for this year.

“To be clear, we see little upside now in the shorter term,” Goldman Sachs strategists led by Peter Oppenheimer wrote in a note. Mark Haefele, chief investment officer at UBS GWM, concurred, saying “our base case now is for only modest upside for stocks.” 

Both Goldman and UBS GWM have a year-end target of 4,700 index points for the , less than 2% higher from current levels for the U.S. benchmark. They also both see the gauge dropping by around 22% to 3,600 index points in a downside scenario. 

While developed markets have recouped the losses seen after Russia invaded Ukraine, they are still below their January records. The lackluster performance follows a strong rally on the back of a post-pandemic economic rebound that saw major indexes climb to successive highs. 

UBS GWM said its cautious view “partly reflects risks to corporate profits,” while Goldman’s team said “client conversations reveal a notable lack of conviction or enthusiasm for U.S. equities at current valuation levels,” citing a “slowing economy and rising rate environment.” 

Generali Investments echoed the pessimism: “We see little value in chasing the March equity market rebound at this level of valuation,” the firm said in its quarterly outlook. “The sharp fall in equity volatility relative to bond volatility is not sustainable.”

Still, while the rally may be running out of steam, both Goldman and UBS GWM see opportunities for investors, with the latter recommending a focus on energy, food, data, and climate — areas which are set to benefit from a renewed focus on security and stability in the aftermath of the war.

For Goldman’s team, instead of playing specific styles such as growth versus value stocks, investors must look for individual companies “that can innovate, disrupt, enable and adapt” and focus on margins.

©2022 Bloomberg L.P.

 

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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