Goldman Sachs upgrades global equities view on earnings optimism
Global markets face renewed pressure from higher oil prices, sticky inflation concerns and a bond selloff tied to rising debt levels. Against that backdrop, Goldman Sachs raises its three-month view on global equities to overweight from neutral, citing supportive earnings growth and more attractive valuations before the third-quarter reporting season.
Highlights
- Goldman Sachs upgrades its three-month global equities view to 'overweight' from 'neutral', citing attractive entry points ahead of Q3 earnings.
- Key near-term equity risks include higher rates and rising energy prices, with Middle East oil supply concerns elevating inflation and rate expectations.
- Goldman upgrades its 12-month government bonds stance to overweight, expecting bonds to transition from a portfolio headwind to a hedge.
Updated allocation stance before earnings
As reported by Reuters, Goldman Sachs on Monday upgrades its three-month view on global equities to "overweight" from "neutral," saying the recent market pullback creates a more attractive entry point for stocks ahead of third-quarter earnings.The bank says its shorter-term view now aligns with its bullish 12-month stance, even as investors contend with volatility driven by energy markets and interest-rate expectations. Goldman remains overweight on Asia and the U.S. and underweight on Europe.
Risks remain from rates and energy
Goldman flags higher rates and rising energy prices as the main near-term risks for equities. Middle East supply concerns have lifted oil prices, feeding inflation worries and reinforcing fears that borrowing costs could stay higher for longer.The bank also favors a barbell strategy, combining technology stocks with bond-like equities. It says both ends of that positioning could benefit if rate pressures ease, while also offering some protection if technology shares retreat or growth concerns intensify.
Goldman additionally upgrades its 12-month stance on government bonds to overweight, saying bonds should gradually shift from being a portfolio headwind to acting as a hedge.
Diesel and crude prices stayed in focus as geopolitical tensions and uncertainty over a potential, limited waiver related to Russian diesel exports kept fuel markets on edge. Our earlier article noted that with oil holding around $100 a barrel, investors were closely watching the inflation outlook, bond yields, and the start of third-quarter earnings for signals on how energy-driven price pressures could spill over into broader markets.
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