As part of its latest asset allocation, Goldman Sachs is downgrading equity markets, for which it is no longer a buyer, with the possibility of entering a recession, the probability of which is now assessed at more than 40%. But “there are reasonable alternatives.”
On the stock market, “TARA” warns that the minimum in equities has not yet been reached | Photo credits: Richard Drew/AP/SIPA
Goldman Sachs is no longer a buyer of stock markets. In its latest asset allocation note, summarized by Bloomberg, the investment bank is now “underweight” the asset class, citing pressure on valuations and earnings of related companies, rising real yields and the prospect of entering a recession.
Rising real yields remain a major headwind to asset class valuations and global earnings revisions are beginning to trend downward outside of Europe and the US. JapanGoldman Sachs strategists, who now assess the risk of entering a recession at more than 40%, say in a note, “ which historically reflects a high risk of falling in the stock markets. »
“Tina” outside, “Tara” inside
” Investors now face ‘Tara’ (‘There are reasonable alternatives’) and bond yields look potentially more attractive writes the runner. An acronym that is opposed to “Tina”, according to which there is, this time, no alternative to equities and an issue that has been dragging risk assets such as equities for many years, in times of negative real rates.
Last week, US strategists at Goldman Sachs lowered their year-end target for the S&P 500 index to 3,600 points, from 4,300 points previously. Also, those in the area EMEA (Europe-Middle East-Africa) lowered their targets for European equities after lowering their earnings estimates.
” This bear market hasn’t bottomed out yet Goldman Sachs wrote in this note earlier in the week.