Global Equities Higher Over Next 12-Months, But U.S. Equities (SPY) Will Be a Dog - Goldman
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Strategists at Goldman Sachs are advising clients to stay neutral on equities near-term. Cyclical and political uncertainty is still high and this could lead to a 3 percent decline for stocks over the next 3 months. However, on a 12-month horizon, the picture is much brighter, analysts Anders Nielsen and Peter Oppenheimer believe. Year-over-year returns could exceed 14 percent.
They are recommending clients overweight Asia equities, excluding equities in Japan. They are neutral on equities in Europe, and underweight U.S. equities.
Over the next 12 months, U.S. equities could significantly under perform. Outside the U.S., investors could see "good returns" as growth momentum turns.
Eventually economic growth will improve in Europe and China, although the exact timing is unknown. The strategists warn that it could be too early for short-term investors to fully commit to a turnaround. Investors with a 12 month time horizon may feel more comfortable with Goldman's call.
The S&P 500 is expected to lose 3.6 percent in three months and gain 1.9 percent in 12 months. Stoxx Index (Europe) is expected to lose 3.3 percent in 3 months and gain 17.5 percent in 12 months. MXAPJ (Asia ex-Japan) expected to lose 6 percent in three months, but gain 25.1 percent in 12 months.
SPDR S&P 500 ETF (NYSE: SPY) is higher by 6.2 percent year-to-date.
Vanguard MSCI Europe ETF (NYSE: VGK) is lower by 1.4 percent year-to-date.
iShares FTSE/Xinhua China 25 Index ETF (NYSE: FXI) is lower by 9.78 percent year-to-date.
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They are recommending clients overweight Asia equities, excluding equities in Japan. They are neutral on equities in Europe, and underweight U.S. equities.
Over the next 12 months, U.S. equities could significantly under perform. Outside the U.S., investors could see "good returns" as growth momentum turns.
Eventually economic growth will improve in Europe and China, although the exact timing is unknown. The strategists warn that it could be too early for short-term investors to fully commit to a turnaround. Investors with a 12 month time horizon may feel more comfortable with Goldman's call.
The S&P 500 is expected to lose 3.6 percent in three months and gain 1.9 percent in 12 months. Stoxx Index (Europe) is expected to lose 3.3 percent in 3 months and gain 17.5 percent in 12 months. MXAPJ (Asia ex-Japan) expected to lose 6 percent in three months, but gain 25.1 percent in 12 months.
SPDR S&P 500 ETF (NYSE: SPY) is higher by 6.2 percent year-to-date.
Vanguard MSCI Europe ETF (NYSE: VGK) is lower by 1.4 percent year-to-date.
iShares FTSE/Xinhua China 25 Index ETF (NYSE: FXI) is lower by 9.78 percent year-to-date.
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