Investors should favor stocks over bonds as the economy supports risk-on sentiment, Goldman analysts say.
The US economy is in a pro-risk, late-cycle environment due to Fed easing and a strong economy.
AdvertisementRisk-on sentiment is back after a brief flight to safety over the summer, and that should support stocks over bonds in the coming months, Goldman Sachs analysts said in a note Tuesday.
AdvertisementFed cutting cycles in general tend to support risky assets as long as the economy avoids a recession, the analysts say.
This risk-on, late-cycle backdrop means stocks will benefit from higher earnings growth and valuations as bonds face downside risks, the analysts say.
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