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Goldman sees stronger second-half growth, says to buy cyclical companies

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Heightened political risk and global policy uncertainty could also trigger some volatility, the Wall Street bank said.

Specifically, Goldman recommended cyclical sectors like financials and industrials, with an emphasis on transportation companies.

The recommendations also include a preference for "bond proxies" that have stable cash flows and high dividends including real estate, which has the third-highest dividend yield on the S&P 500 at 3.01%. Utilities also carry a high dividend yield at 3.17%, according to FactSet, but Goldman has cut its recommendation on the sector from neutral to underweight. Utilities has been a laggard all year, returning 12.9% vs. the S&P 500's 20%.

While economic growth slogged through the second quarter at what the Atlanta Fed projects to be a 1.3% pace, Goldman sees a shift in the economic data recently that will see growth rebound to around 2%.Fed coming through with two cuts this year"Easy monetary policy is one reason US economic growth will likely accelerate in coming quarters," Snider wrote.

One policy uncertainty area is health care, where both Democrats and Republicans have vowed to lower drug prices. Goldman recommends underweighting the sector while buying health care providers over pharmaceuticals "Be wary of stocks in industries that will likely feature in campaign proposals and industries with high exposure to US-China trade," Snider wrote.

 

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GS is a criminal racketeering organization disguised as an investment bank lol

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