Insider News: Goldman Sachs’ Top Equity And Credit Strategists Lay Out Their Approaches To Investing

Mar 20, 2022

Insider News: Goldman Sachs' Top Equity And Credit Strategists Lay Out Their Approaches To Investing In Both Markets As Uncertainty Mounts, Including Portfolio Tweaks They're Making

Peter Oppenheimer spares no words: his business, Goldman Sachs, is cutting its predictions for corporate earnings and economic growth "virtually everywhere."

At a Monday media briefing, Goldman's chief global equities strategist and head of macro research in Europe said that the company is now forecasting profits growth of 5% for the S&P 500 and 2.9% for the US economy. This is below the firm's earlier forecasts of 8% profit growth and a 3.1% growth rate for the US economy.

The Russian invasion of Ukraine is the latest aspect contributing to 2022 being a more challenging year for markets than many analysts predicted. Commodity prices are soaring as supply networks are once again knocked off course, and inflation is at its highest level in 40 years.

Goldman's forecasts are not terrible – the GDP projection is broadly in line with the long-term trajectory of the economy. However, not long ago, analysts predicted an above-average year.

According to Oppenheimer, the reality for investors this year will be a market with a broad trading range and reduced stock returns. He said that the current economic cycle would be distinct from the last one, during which growth was rare and investors were ready to pay premium prices for companies that outperformed the general trend.

He anticipates a cycle fueled by excessive capital expenditure on decarbonization, the need for energy independence, and increased military expenditures in Europe. The cycle's greatest winners will be enterprises that experience high demand and can offer the financing that other businesses want.

"We believe that margin sustainability will become a much more critical factor for investors," he explained. "Lots of money will be required to scale up infrastructure in order to deploy these new energy sources, which expands the opportunity set for businesses that will provide that funding."

He is especially positive on commodities and commodity prices, saying that corporations in sectors such as oil drilling and mining have been hesitant to invest in previous years and will now be forced to do so.

"We've been fundamentally optimistic on commodities for some time now due to underinvestment in the commodity business after the collapse of demand due to the financial crisis," he said. "If we are entering a time of steadily increasing interest rates and growing inflation, we would expect real assets to take on a larger and more valuable position."

According to Oppenheimer, shares should beat bonds and cash throughout time, and his tilt to commodities comprises both shares in commodity producers and the commodities they create. Meanwhile, he says that increasing the monetary allotment made sense even before the conflict began. He maintains a neutral stance on credit and advises investors to underweight government bonds.

The credit markets have remained stable

Additionally, Chief Credit Strategist Lofti Karoui said at Monday's media event that there were two significant conclusions from the credit markets over the previous three weeks. One is that investors just do not anticipate a recession. The other is that investors continued to act rationally despite the shock to markets caused by the conflict in Europe.

He asserts that even bonds classified as quite unstable and well below investment grade at the CCC level fared well during the initial turbulence. That is a positive indicator.

"It's consistent with a market that believes high-yield issuers can survive a recession," he said, adding that corporate credit issuers' quality is higher than it used to be. "This is likely the best CCC batch since 2006-2007."

It's fortunate, as he said, that the current economic cycle is still in its beginning and that inefficiencies in the loan market have not yet developed. However, Karoui noted one significant difference between this cycle and the previous one: whereas the credit market was an excellent leading indicator during the economy's recovery in 2020-2021, its performance is now more closely tied to the stock market.

This suggests that investors should not wait for the credit market to signal an increase in bullishness.

"I absolutely do not anticipate credit to be the leading signal, as it was in March 2020," he added.

Meanwhile, he says that the contrast between the Fed's actions and those of the European Central Bank has heightened his optimism in the US market. This month, the European Central Bank surprised many investors by announcing its intention to end its emergency asset buying in the coming months.

"There is a policy gap," he noted, adding that he would be less bullish about Europe until the European Central Bank adopts a more dovish stance.

Subscribe Our Newsletter

Job Report 2023 Is 187,000 New Hires in July, Weaker Since 2020.

Milena

Job Report 2023 Is 187,000 New Hires in July, Weaker Since 2020. Here is Why.

As the economy enters fall, hiring is beginning to slow down but wage growth is still strong, challenging the Federal Reserve's fight against inflation making the job report 2023 unexpected.

Companies
Here's Why the Stock Market is Up Despite Concerns

Milena

Here’s Why the Stock Market is Up Despite Concerns When Will the Stock Market Recover.

Many of the challenges from last year are still present. The difference now could be in how investors are positioned in relation to the question of when will the stock market recover.

Stocks
Get the ultimate solution: B2BinPay Get the ultimate solution: B2BinPay
Sponsored
Nato

What is Data Tokenization, and How Does it Protect Your Sensitive Information?
Data breaches are a constant threat. Discover how data tokenization offers a powerful solution for enhancing data security and protecting sensitive information.

discover
The Pros and Cons of Accepting Cryptocurrency as Payment

Oliver

The Pros and Cons of Accepting Cryptocurrency as Payment

Digital currencies entered the world of business and finance only in the late 2000s. As a decentralized currency and payment option, Bitcoin allowed individuals to transfer money without going through intermediaries. The underlying technology that supports Bitcoin, known as a blockchain, has been considered one of the most significant innovations of recent years.

Crypto Payments
Contact us bg

Contact Us

Contact the Liquidity Provider
for any questions and advertising inquiries

    Please fill out this contact form to get in touch with us

    / 3000

    By clicking “Get in touch” button, you agree to the privacy policy

    Successful!
    Thank you for your request.
    We will contact you shortly.
    Close

    Constantine

    How to Start a Multi-Asset Brokerage?

    How to Start a Multi-Asset Brokerage

    Hazem

    Crypto Ransomware – How They Happen and How to Avoid Them

    Crypto ransomware explained

    Constantine

    Best Web3 Browsers in 2025

    Best Web3 Browsers

    Constantine

    Best DAO Projects in 2025

    Best DAO projects in 2025

    Alexander

    Crypto Nodes That Pay: Your 2025 Guide to Top Passive Income Opportunities in Crypto

    crypto nodes that pay

    Alex

    Pi Network: Scam or Groundbreaking Crypto? The Full Analysis

    Pi Network Explained

    Constantine

    Triple Net Lease: Meaning, Benefits, and Strategies Explained

    Triple Net Lease

    Constantine

    Hanging Man Pattern: How to Identify and Trade It Effectively

    Hanging Man Pattern

    Alex

    5 Infinite Banking Mistakes That Could Cost You Thousands

    Infinite Banking Mistakes to Avoid

    Aleksander

    Solana Firedancer: Solving Solana’s Biggest Problems with a New Engine

    Solana Firedancer explained

    Alexander

    What Is an Interest Coverage Ratio? How to Use This Financial Metric to Evaluate Company Health

    Interest Coverage Ratio Explained

    Hazem

    After-Hours Trading: Can You Trade After Financial Markets Close?

    After-Hours Trading Explained

    Alexander

    How to Scale a Crypto Exchange Business and Stay Competitive

    how to scale crypto exchange business

    Constantine

    Crypto CrypticStreet Review: The Future of DeFi and Secure Crypto Trading

    Crypto CrypticStreet Review: The Future of DeFi and Secure Crypto Trading

    Alexander

    Bitcoin Power Law Explained: How It Shapes BTC’s Long-Term Growth

    Bitcoin Power Law Explained: How It Shapes BTC’s Long-Term Growth

    Hazem

    Megaphone Pattern​: What Is It? How to Use It In Trading

    Megaphone Pattern​: How to Read & Trade with It

    Constantine

    Top 5 Liquidity Bridge Providers in DeFi

    Top 5 Liquidity Bridge Providers in DeFi

    Hazem

    Max Funded IUL Explained: Is It a Legitimate Financial Strategy?

    Understanding Max Funded IUL

    Alexander

    Tax Refund Timeline: When Will You Get Your Tax Return?

    how long does it take for tax refund

    Constantine

    Crypto Liquidity — What is it, and How to Measure It?

    What is Crypto Liquidity and How to Measure It?

    Constantine

    AI in Finance: A Game-Changing Trend Shaping the Industry

    AI in Finance

    Hazem

    5 Ways to Make Money with ChatGPT and Build Your Wealth

    Make Money with ChatGPT

    Constantine

    Top AI Companies to Invest in April 2025

    Top AI Companies to Invest in March 2025

    DeepSeek vs ChatGPT: Which AI Technology is Better For You?

    DeepSeek vs ChatGPT: Feature-by-Feature AI Tool Comparison
    liquidity-provider-logo
    • News
      • Stock Market Forecast
      • Stocks
      • Banks and Finance
      • Companies
      • Crypto
      • Forex
      • AI
      • Technology
      • DeFi
      • NFT
    • Articles
      • Crypto Payments
      • Trading
      • Crypto Exchange Business
      • Forex Business
      • Fintech
      • Liquidity
      • FinTech Awards
      • Blockchain
      • Investing
      • NFT
      • DeFi
    • More
      • Videos
      • Liquidity Providers List
      • Crypto Payment Providers
      • White Label Brokerage Platforms
      • Broker CRM Platforms
    [email protected]

    © 2024 Liquidity Provider. All Rights Reserved

    Privacy Policy Cookie Policy
    This site is registered on wpml.org as a development site. Switch to a production site key to remove this banner.