Goldman Sachs and the three themes: firm shares mid-year outlook
Three themes are set to dominate the investment environment in the months ahead according to a Wall Street stalwart.
Goldman Sachs Asset Management has released its Mid-Year Outlook 2024 with its investment professionals sharing their views on the most meaningful market trends and potential opportunities and risks for the remainder of this year.
The major themes that it says will set the tone for the global investing landscape and will be the likely focus at least until year end are:
“Expectations of US rate cuts were repeatedly pushed back in 2024’s first half due to inflation pressures, while other central banks signaled the intent to or began to cut rates. This has created a complex and challenging environment for managing fixed income portfolios,” said Ashish Shah, Chief Investment Officer of Public Investing at Goldman Sachs Asset Management.
Shah added that balanced portfolios will be needed given the geopolitical concerns around conflicts in the Middle East and Ukraine, and the US presidential election. Meanwhile, opportunities for investors include disruptive technology led by AI, and sustainability.
With expectation of a continuation to a soft landing for the US economy along with disinflation, any urgency for the Fed to cut rates has dissipated, while some other major economies have begun cuts but are likely to do so slowly amid remaining concern about inflation risks.
Lindsay Rosner, global head of Multi-Asset Fixed Income, says that investors are not demanding too much compensation for credit risk amid the tightest credit spreads for some years.
“Corporate balance sheets are generally healthy. US companies are better able than in 2019 to service their debt, have more cash on hand, and are generating more
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