Goldman upgrades global equities on earnings optimism

Oct 12 (Reuters) - Goldman ‌Sachs on ​Monday ​upgraded its three-month view on global equities to "overweight" from "neutral", saying earnings growth remains supportive ‌for equities and valuations have become more attractive ⁠ahead of the earnings season.

Here are some details:

• Middle East ‌supply concerns have boosted ‌oil prices, driving inflation and higher-for-longer rate fears, while mounting corporate and sovereign debt has fueled ​a global bond selloff that rattled markets in recent weeks

• Despite those headwinds, Goldman said the ⁠recent pullback has created a more attractive entry point for equities ​heading into third-quarter earnings, bringing its three-month outlook in line with its bullish 12-month stance

• ​The bank remains "overweight" on Asia ‌and the US and "underweight" on Europe, while flagging that higher rates and energy ⁠prices remain the main near-term risks to equities

• It added that US midterm election uncertainty could potentially increase ⁠market volatility from current low levels

• Goldman prefers a "barbell strategy," ​with tech stocks at one end and bond-like equities on the other — both poised to benefit from rate relief, while ‌also providing a hedge should tech sell off or growth concerns intensify

• It ‌also upgraded its 12-month stance on government bonds to ⁠an "overweight" rating, adding, "We ‌believe bonds should gradually ​move from portfolio headwind to hedge"

(Reporting by Joel Jose in Bengaluru; Editing by Vijay ‌Kishore)

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