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They revealed Goldman Sachs is Overweight cash, and Neutral on equities, credit, bonds, and commodities.
We “are selective on adding cyclical risk and look for carry/ relative value opportunities,” the analysts wrote. “We remain focused on finding balance in portfolios with continued regional imbalances and bond markets still finding their new balance.”
“While we still expect a US soft landing (our economists lowered their US 12mn recession probability to 15% from 20%) and see further inflation normalisation into 2024, we think risky assets are already reflecting a more benign macro backdrop.”
The analysts noted near-term US macro news flow might become less friendly, while the growth/inflation mix outside the US has already worsened during the summer.
In addition, they explained that with continued disinflation and slowing global growth, coupled with bond risk premia settling, they “expect equity/bond correlations to turn less positive.”
