Goldman Sachs publishes the list of securities to have in its portfolio in the second half of 2021. Expects a lateral consolidation of the stock market and higher interest rates. Expect the S&P 500 to end the year at 4,300.
Goldman Sachs has just released its recommendations for the second half of the year, with forecasts of a lateral consolidation of the stock market and higher interest rates for investors. In this context, the investment bank advises shareholders to buy stocks of short duration , high growth investment ratios and pricing power .
With the 10-year US Treasury yield currently at 1.43%, Goldman expects it to rise to a high of 1.9% by the end of the year. This increase in interest rates will likely weigh on high-growth stocks and benefit cyclical stocks, the investment bank notes.
On the other hand, even though long-lived growth stocks have outperformed their short-lived counterparts in recent weeks, Goldman expects this operation to reverse, especially if its forecast of rising interest rates materializes . Ford, CVS, Intel and AT&T are some of the short-lived securities included in the investment bank’s list
“Those companies that have consistently invested for growth have outperformed the S&P 500 so far this year and are better positioned to continue growing despite the expected slowdown in economic activity,” says Goldman Sachs. Recommended high-growth stocks include Facebook, Alphabet, General Motors, and Costco.
“We also advise investors to focus on stocks with high pricing power, as evidenced by their high and stable gross margins ,” Goldman explains. In this case, the bank mentions securities such as Activision Blizzard, Etsy, Procter & Gamble, and Adobe.
Regarding the outlook for the S&P 500, Goldman aims for it to end the year at 4,300 points and increase 7% to 4,600 integers by the end of 2022 , while the US unemployment rate will fall to 3.5% .