It's time for investors to capture a rise in equities as markets price in the end of the Federal Reserve hiking cycle, Goldman Sachs says. With the Silicon Valley Bank collapse last month, many investors are now expecting the end of the central bank's aggressive inflation-fighting campaign. According to the futures market, policymakers are set to pivot after raising rates by 25 basis points once more in May. For traders, that could mean upside in markets.
"While historical precedent suggests upside risk to our forecast for a flat equity market, we believe S & P 500 valuations and earnings each face specific headwinds in 2023 that will prevent nearterm returns from being as strong as usual at the end of previous tightening cycles," Kostin wrote. Still, he reiterated that he does not expect a recession in his base case.
Are we going to talk about the 32 Trillion elephants in the room? IF the markets and economy recover too soon, inflation goes up. Fed has to QT and raise rates. How do they do that long term with so much debt?
Paywall. Someone pls send me link
One to bookmark as a potential 'Just before a Market Crash' type of tweet.