Goldman Sachs upgrades short-term rating on global equities to “Overweight,” with S&P 500 third-quarter earnings growth of 27%
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Goldman Sachs upgraded its short-term rating on global equities and expects S&P 500 constituents’ third-quarter earnings to grow year on year by 27%。
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Goldman Sachs upgrades its short-term rating on global equities to “Overweight,” with the S&P 500 third-quarter earnings growth expected to reach 27%BlockBeats reported that October 12, Goldman Sachs upgraded its rating on global equities for the next 3 months from “Neutral” to “Overweight,” while maintaining a bullish stance for the following 12 months. Goldman Sachs believes that continued corporate earnings growth, a decline in equity valuations from their summer highs, and reduced investor positioning have improved the risk-reward profile of equities.
FactSet data show that the forward P/E ratio for the S&P 500 index over the next 12 months has fallen from June at the beginning of 21.1 times to 19.1 times, compared with approximately 22 times at the beginning of the year. Goldman Sachs expects third-quarter earnings for S&P 500 constituents to grow 27%year on year, potentially marking the third consecutive quarter with earnings growth exceeding 25%;AI infrastructure investment remains an important driver.
By region, Goldman Sachs maintains an “Overweight” rating on U.S. and Asian equities and an “Underweight” rating on European equities. It has also upgraded its rating on government bonds for the next 12 months to “Overweight,” recommending a “barbell strategy,” with technology stocks at one end and stocks with bond-like characteristics at the other, while favoring shorter-duration bonds and cash assets.
Goldman Sachs also warned that rising U.S. Treasury yields, higher energy prices, and uncertainty surrounding the U.S. midterm elections could intensify market volatility. Its bullish view remains contingent on corporate earnings continuing to materialize and financial conditions not deteriorating further.
Original link https://m.theblockbeats.info/flash/371419
Key points
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Goldman Sachs upgraded its rating on global equities for the next 3 months from “Neutral” to “Overweight,” while maintaining a bullish stance for the following 12 months.
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FactSet data show that the S&P 500 index’s forward P/E ratio over the next 12 months fell from June at the beginning of the year 21.1 times to 19.1 times, compared with approximately 22 times at the beginning of the year.
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Goldman Sachs expects S&P 500 constituents’ third-quarter earnings to grow year on year by 27%, and believes that AI infrastructure investment remains an important driver.
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Goldman Sachs maintains an “Overweight” rating on U.S. and Asian equities and an “Underweight” rating on European equities.
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Goldman Sachs upgraded its rating on government bonds for the next 12 months to “Overweight.”
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Goldman Sachs warned that rising U.S. Treasury yields, higher energy prices, and uncertainty surrounding the U.S. midterm elections could intensify market volatility.
AI-assisted interpretation
The following is analysis, separate from reported facts. Verify important claims independently.
“Overweight” means that Goldman Sachs considers the relevant assets more worthy of increased allocation relative to others, but it does not mean that prices will necessarily rise. Its assessment is based on continued corporate earnings growth, a decline in equity valuations from their summer highs, and reduced investor positioning. Goldman Sachs recommends a “barbell strategy”: technology stocks at one end and stocks with bond-like characteristics at the other, while favoring shorter-duration bonds and cash assets.
Why it matters to readers
This adjustment covers global equities, regional equities, and government bonds, reflecting Goldman Sachs’ improved assessment of the risk-reward profile of equities over the next 3 months. S&P 500 earnings growth and valuation changes are important factors in its bullish view on U.S. equities.
Beginners can view the rating as an institutional opinion rather than a guarantee of buying or selling outcomes. They can continue to monitor whether corporate earnings meet expectations and whether Treasury yields, energy prices, and financial conditions deteriorate.
Risks and unknowns
The content was relayed by BlockBeats; the evidence does not include Goldman Sachs’ original report, so the complete wording and applicable conditions cannot be verified.
S&P 500 constituents’ third-quarter earnings growth of 27%is a Goldman Sachs forecast, not a result that has already been realized.
Goldman Sachs’ bullish view depends on corporate earnings continuing to materialize and financial conditions not deteriorating further.
Related Developments
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Uncertainty related to U.S. Treasury yields, energy prices, and the U.S. midterm elections could intensify market volatility.
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