Goldman Sachs Asset Management (GSAM) during their mid-year outlook stated that they expect the economy to grow at a slower rate of 2% for the rest of the year. Combined with that they see equity indexes staying relatively flat due to worsening economic conditions and political uncertainties with the upcoming election in the U.S. Lindsay Rosner, head of multi-sector investing, mentions that the fed is achieving a soft landing and expects a rate cut to come in September. She expects rate cuts to continue at a rate of 1 per quarter with a decrease of 25 basis points each time.
Even with equity indexes staying flat GSAM believes that there are still opportunities to invest in in the second half of 2024. Following the record-breaking returns of a small handful of AI companies GSAM recommends diversifying the exposure to this trend to protect returns from a chance of decelerating earnings growth. GSAM also sees foreign equities in Indian and Japan as an attractive investment given the current economic conditions. With regards to fixed income GSAM stated that as interest rates fall, they expect the fixed income market to benefit especially the high-yield bond market and structured credit. Rosner also stated that “Uncertain is just kind of the status quo right now”, so ultimately much is up in the air in the second half of 2024 as there is uncertainty around the coming elections and future economic indicators.
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