Goldman Sachs has advised clients to increase their stock holdings, upgrading equities to overweight for the next three months. The firm also upgraded bonds to overweight for a 12-month period. This strategy shift comes as Goldman Sachs and three major competitors prepare to release their quarterly financial reports before the market opens on Tuesday.
The four banks, including Citigroup, JPMorgan, Wells Fargo, and Goldman Sachs, have a combined market value of $1.6 trillion. Analysts expect S&P 500 earnings to rise by 25% this quarter, with Goldman Sachs anticipating that companies will exceed these projections. Market expectations for profit per share growth vary, with Citigroup and JPMorgan facing forecasts of 19% and 17% respectively, while Wells Fargo and Goldman Sachs face lower bars of 7% and 5%.
Market data indicates that 84% of S&P 500 stocks are currently trading at least 10% below their all-time highs, with the real estate sector showing the most significant drawdown at 97%. Investors remain cautious regarding the impact of high interest rates on mergers and acquisitions. Market participants are also awaiting upcoming US inflation data, which is scheduled for release on Wednesday.
