Money Goldman Sachs: stocks will perform better than bonds in...

Goldman Sachs: stocks will perform better than bonds in the coming year


The stock market is overbought, but it still looks much more attractive than bonds, writes Goldman Sachs.

In the next 12 months, the stock market will show better dynamics than the bond market, predicts the American investment bank Goldman Sachs. Global stocks have recouped on average 99% of losses incurred after the coronavirus-triggered stock market crash, and the S&P 500 has reached new all-time highs.

The stock market is now more overbought than it has ever been since the dot-com bubble in the late 1990s, but a number of indicators indicate that stocks are rarely as attractive as bonds, Goldman Sachs wrote. In their assessments, they point, in particular, to the forward P / E multiple (share price / earnings per share – approx., as well as the fact that the risk premium included in the share price is close to record values.

In 12 months, the European stock market may continue to show outperformance relative to bonds, but the US stock market is likely to lag behind, the bank predicts.

In late July, Goldman Sachs wrote that stocks and bonds will generate below average returns over the medium term.

Matthew Leising
I cover market structure for News Alarms, specifically how the bond, derivatives, and cryptocurrency markets work or don't.

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