VIX FEAR INDEX IS FLYING


SOURCE:TRADINGVIEW

Goldman Sachs Research forecasts gold prices will continue to rise, reaching $3,100 per troy ounce by the end of 2025, driven by increased central bank demand and gold ETF purchases. Speculative trading may counterbalance this trend, but persistent policy uncertainty could push prices even higher.

US stocks have underperformed global peers in early 2025, breaking a long-standing trend. Chinese and European equities have gained 14% and 8%, respectively, while US stocks lag. Market conditions are shifting, favoring diversification and stock picking over concentration in US tech stocks.

Jared Cohen, President of Global Affairs at Goldman Sachs, highlights the vulnerability of AI infrastructure due to its reliance on undersea data cables, which geopolitical tensions could threaten.

The S&P 500 is presenting strong opportunities for stock pickers, with individual stock performance increasingly driven by company fundamentals rather than macroeconomic trends. This environment is expected to persist due to AI-driven differentiation and policy uncertainty.

A briefings brainteaser asks which sector performed best during the 2018-2019 US trade conflict, with multiple choices provided.

Goldman Sachs analysts continue to monitor global market trends, including AI trade shifts and European economic developments.

Here’s a summary of today’s key insights from Goldman Sachs Briefings:

Goldman Sachs CEO David Solomon is optimistic about the business environment and expects capital markets activity to return to 10-year averages in 2025. He attributes this to regulatory changes and a more collaborative investment landscape.

China's AI development is expected to boost AI adoption globally by lowering costs and increasing accessibility. Some Chinese AI models are reportedly cheaper to build, prompting US AI-related stocks to drop by 10% earlier this week.

Investor sentiment is shifting in 2025. Gold is increasingly favored, with 32% of surveyed investors calling it the best investment choice, up from 5% last year. India remains the top emerging market investment destination due to its manufacturing expansion and 6.5% expected economic growth through 2030. The "S&P 493" (excluding the Magnificent 7) is expected to outperform the broader S&P 500.

Goldman Sachs Asset Management sees India’s private equity and capital markets growing but warns of high valuations. Private credit demand is expected to rise due to M&A financing needs.

US stocks remain attractive, with Goldman Sachs' Investment Strategy Group (ISG) maintaining an overweight position. They expect an 8% return for the S&P 500 in 2025 but anticipate slower outperformance versus non-US stocks over the next five years.

Despite strong gains in gold and bitcoin in 2024, ISG does not view them as strategic portfolio assets, citing volatility and lack of cash flow generation.

Nuclear energy is gaining attention due to rising power demand from AI data centers.

SEC approves NYSE proposal to limit the use of reverse stock splits to regain compliance with price criteria

The 4Q2024 Quarterly Pulse Check highlights key trends influencing investor sentiment across sectors ahead of earnings announcements:

Industrials & Materials: Investors are cautiously optimistic about a short-cycle recovery but are awaiting stronger data before increasing exposure. They are bullish on the long-term AI cycle, favoring select AI names, airlines, and high-quality companies with unique growth stories.

Telco, Media, and Internet: Market volatility and fluctuating inflation expectations have complicated the Q4 outlook. Strong ad budgets from political spending and brand recovery boosted performance. Connected TV (CTV) and companies with live sports and news exposure remain investor favorites.

Technology: AI remains a key driver across tech sub-sectors, particularly in software, due to monetization opportunities and advancements in agentic AI. While the sector is expected to lead markets in 2025, moderated returns are anticipated, with Nvidia leading semiconductor enthusiasm.

Consumer: The US consumer appears stable, with positive Q4 pre-announcements. Home furnishing and improvement stocks are unexpectedly favorable despite higher interest rates. Investor sentiment is more negative toward packaged foods and beverages but less so for home and personal care products.

Financials: Bank earnings are promising, with investors optimistic despite high expectations. Underweight positions from long-only managers persist, though some caution against focusing solely on historical valuation metrics like Tangible Book Value.

Healthcare: After a challenging 2024 due to clinical trial setbacks and geopolitical factors, MedTech is seen as a promising area for 1H25 due to its resilience to macro and policy risks. Optimism is growing for broader interest in pharmaceuticals and managed care as new policies take shape.

These sector-specific insights reflect diverse challenges and opportunities, with AI and select growth stories playing a central role across industries. (ubs.com)

S&P 500 was impressive in 2024