Gold holds above $2015

Goldman Sachs shifts stance on global equities from neutral to overweight.

By Nadia Elbilassy | @Nadia Elbilassy | 19 February 2024

Market close
  • Historical central bank cutting cycles seen as beneficial for risky assets says Goldman Sachs, but caution urged as markets have already priced in anticipated interest rate relief.

  • Goldman Sachs anticipates only modest returns in the equity market, highlighting the challenge of optimistic sentiment and positioning.

  • Oil prices maintain an upward trajectory despite pessimistic oil demand forecasts, with WTI hovering around $78 and Brent at $82.9.

On the Market Watch:

Goldman x Equities

Goldman Sachs has shifted its stance on global equities from a neutral position at the start of the year to an overweight position. This adjustment is driven by a revival in manufacturing activity and anticipated economic growth, supported by recent positive data on global manufacturing activity.

The bank acknowledged that historical central bank cutting cycles have typically been beneficial for risky assets. However, caution is advised, as markets have already factored in the anticipated relief in interest rates since last year.

Furthermore, Goldman Sachs expects only modest returns in the equity market. The investment bank points out a significant challenge, emphasizing that current sentiment and positioning are already quite optimistic.

In Commodities

Gold prices have steadied, sustaining a rebound from recent one-month lows after slipping below a crucial support level. The prices briefly fell below $2,000 per ounce following a week filled with data that disclosed stronger-than-expected U.S. inflation figures and a notable 0.8% decline in retail sales.

Meanwhile, Oil prices maintained an upward trajectory, dismissing the Energy Information Administration's (EIA) pessimistic demand forecasts for oil. Both benchmarks registered approximately a 0.3% gain on the day, with West Texas Intermediate (WTI) hovering around $78, while Brent was last observed at $82.9.