Goldman Sachs downgrades stocks to neutral for short term

Sat Jul 26, 2014 1:58am IST

Traders work on the floor of the New York Stock Exchange July 21, 2014. REUTERS/Brendan McDermid

Traders work on the floor of the New York Stock Exchange July 21, 2014.

Credit: Reuters/Brendan McDermid

Related Topics

Stocks

   

REUTERS - Goldman Sachs (GS.N) downgraded its global equities allocation to neutral on a short-term basis on Friday, even though the brokerage remains overweight stocks for the longer term.

The firm said in a research note it is worried that a rise in rates will drive stocks lower over the next three months, adding that "we also expect the general pace of returns to slow compared to what we have seen in the last couple of years."

In its note, Goldman said the global acceleration in economic growth is "largely behind us and geopolitical risks are elevated." Despite these thoughts, they still said equities are the most attractive class on a 12-month horizon "by a wide margin."

Equity markets worldwide have rallied steadily through the year. The MSCI All-World Index hit a record in early July, having gained more than 5 percent in 2014. Goldman noted that the gap between dividend yields and government bond yields remains high, and that measure suggests more outperformance by the equity market.

Dividing the world up by regions, Goldman is overweight in Europe and Japan and underweight in the United States. When looking at specific sectors, the firm is high on growth industries - it has overweight ratings for technology stocks in the United States, Europe, Japan and Asia.

(Reporting by David Gaffen; Editing by Ross Colvin and Diane Craft)

FILED UNDER:
  • Most Popular
  • Most Shared

Pending Reform

REUTERS SHOWCASE

Power Theft

Power Theft

India to invest $4 billion to tackle power theft  Full Article 

Debt Funds

Debt Funds

India monitors foreign flows into debt funds, may tighten rules  Full Article 

Bulgari Back in India

Bulgari Back in India

CEO: we shouldn’t have left India so we’re back  Full Article 

 Hindu "Modi-fication"

Hindu "Modi-fication"

Fears grow about Hindu "Modi-fication" of education  Full Article 

Weak Credit

Weak Credit

Hard to hit tax revenue target, credit weak - Jaitley  Full Article 

China Rate Cut

China Rate Cut

China surprises with interest rate cut to spur growth  Full Article 

Gold Imports

Gold Imports

RBI cautious on response to gold import surge  Full Article 

Economic Corridor

Economic Corridor

China commits $45.6 billion for economic corridor with Pakistan  Full Article 

Overseas Funds

Overseas Funds

RBI says overseas borrowed funds can be parked with banks in India  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage