Goldman Sachs: Buy US stocks on dips, heavyweight stocks expected to outperform the market.
Goldman Sachs Asset Management believes that the decline in US stocks will provide an opportunity to buy at a low price, and the market correction will be a good opportunity to rebalance or buy on dips. It is expected that interest rates will be cut in the second half of next year, and the economy can maintain growth. Heavyweight stocks are expected to outperform the broader market. It is believed that there is room for the stock market to rise.
Goldman Sachs Asset Management (GSAM) stated that the resilient US labor market, as indicated by the employment data last Friday (the 8th), has limited the rise of US stocks. They believe that a decline in the US stock market would provide a good opportunity to buy at a lower price. Currently, investors believe that the possibility of a rate cut by the Federal Reserve in March next year is unlikely. With the Fed likely to maintain higher interest rates for a longer period of time, the stock market may soften. However, GSAM stated that any market correction would be seen as a false alarm. If the stock market declines, it would be a good opportunity for rebalancing or buying at a low point. It is still too early to consider the risk premium of underweight stocks. Goldman Sachs economists expect the Federal Reserve to start cutting interest rates in the second half of next year and estimate that the economy can maintain growth under slowing inflation, which will support the stock market, especially heavyweight stocks. GSAM stated that in such economic conditions, high-quality and heavyweight stocks tend to outperform the broader market. Although valuations may seem high, they believe there is still room for further growth. (mn/da)