According to Woofun AI, the Goldman Sachs (GS.US) (Goldman Sachs) strategy team officially recommended that customers increase their stock holdings. This bullish stance will be tested for the first time early tomorrow morning. All four major banks, including Goldman Sachs, are required to release financial reports before opening on Tuesday. Among them, the disclosure of Goldman Sachs's own performance will be a direct litmus test for the effectiveness of their investment strategies.
Strategist Christian Mueller-Glissmann (Christian Mueller-Glissmann) proposed that the weight of stock holdings should be raised to the “overallocated” (overallocated) level within the next three months, and that the same rating upgrade measures for bonds should be taken within 12 months. This logic is based on the judgment that in the context of rising oil prices and bond yields, corporate profits are not damaged by falling stock prices. Goldman Sachs predicts that the earnings performance of each company will be better than the 25% profit growth forecast for the S&P 500 index constituent stocks in the quarter, and believes that improved valuations, strong profits, and mitigated inflation will support the market until 2027.
According to data compiled by Woofun AI, although the S&P 500 index is close to an all-time high, Barclays (BCS.US) (Barclays) indicated that the share price of more than half of the constituent stocks is still at least 20% below the historical high; currently, 84% of the constituent stocks are at least 10% below the all-time high. By industry, the real estate sector retreated the most, with 97% of individual stocks falling by more than 10%, followed by the materials industry 96%, the utilities industry 94%, and the non-essential consumer goods industry 92%, while the energy industry performed relatively well.
Specifically, when it comes to the performance expectations of the four major industries, Citigroup (Citigroup) and JPMorgan Chase (JPMorgan Chase) are highly optimistic. Analysts expect their earnings per share to increase by 19% and 17%, respectively. In contrast, the Nasdaq (NDAQ.US) (Nasdaq) consensus forecast showed that Wells Fargo (WFC.US) and Goldman Sachs had lower expectations of 7% and 5%, respectively. Investor Steve Weiss (Steve Weiss) said on CNBC that this season's results may not be perfect. Although banks welcome new listings, they are cautious about mergers and acquisitions due to high borrowing costs. Money manager Jeanne Harrington (Jeanne Harrington) emphasized that market behavior is more indicative than actual data, and investor reaction will be a key variable.
In terms of potential risk, interest rate pressure persists. KBW's Tom Michaud (Tom Michaud) pointed out that bond yields are at a 24-year high, and bank stocks will remain under pressure until interest rates stabilize. The US will release inflation data on Wednesday. This macro indicator will further affect market sentiment and subsequent trends.