The S&P 500-stock index is down 9 percent since the start of the
year on concerns ranging from negative interest rates to a hard landing
in China. A new survey from Goldman Sachs Group Inc. shows that a
growing proportion of its clients are worried about a global recession.
"More than
one third of the clients attending our recent macro conference in Hong
Kong expect cash will post the highest risk-adjusted return of any asset
class in 2016. Nearly 60 percent of the participants forecast global
equities will deliver a negative return this year."
Kostin and team don’t discredit the heightened concerns, but they do point out that consumers are still sending a number of strong signals that point towards a continued expansion.
The team said that the strength of the consumer should not be overlooked. "Many investors believe the economy is on the precipice of a recession. However, quantitative and qualitative measures of consumer activity suggest spending will continue and the economic expansion will persist."
So unless the consumer starts exercising more caution and spending decelerates, Goldman remains bullish on the global economy. The most recent retail sales numbers were relatively strong across the board, increasing for a third straight month in January, with 8 of 13 major categories showing increases in demand from the prior month.
It's worth noting that Goldman started the year with one of the lowest 12-month targets for the S&P 500, at 2100, but with a number of other firms lowering targets, Goldman is now near the front of the pack. Stocks would have to rise 13 percent to reach that target.
Kostin and team don’t discredit the heightened concerns, but they do point out that consumers are still sending a number of strong signals that point towards a continued expansion.
The team said that the strength of the consumer should not be overlooked. "Many investors believe the economy is on the precipice of a recession. However, quantitative and qualitative measures of consumer activity suggest spending will continue and the economic expansion will persist."
So unless the consumer starts exercising more caution and spending decelerates, Goldman remains bullish on the global economy. The most recent retail sales numbers were relatively strong across the board, increasing for a third straight month in January, with 8 of 13 major categories showing increases in demand from the prior month.
It's worth noting that Goldman started the year with one of the lowest 12-month targets for the S&P 500, at 2100, but with a number of other firms lowering targets, Goldman is now near the front of the pack. Stocks would have to rise 13 percent to reach that target.
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