US equities are an “upward-trending asset class”, a senior manager at investment bank Goldman Sachs has claimed.
The firm’s head of the investment strategy group and chief investment officer of wealth management Sharmin Mossavar-Rahmani made the comments during a Goldman Sachs media roundtable event.
She explained that over the past 15 years, US equities have over-performed and an investor would have seen greater returns from investing in US equities over Chinese equities.
US equities are the most expensive to invest in after Indian equities, but she feels Indian equities are overvalued.
Goldman Sachs believes the probability of a recession hitting the US in 2024 is at 30%, with the nation continuing to show “solid employment” levels.
The company’s head of tactical asset allocation for the ISG Brett Nelson added that he expects the US dollar to appreciate in 2024 by 2% and that interest rates will fall further this year.
Mossavar-Rahmani explained that in UK equities, technology only makes up 1% of the asset class, whereas in the US it makes up 20%.
In regards to the 11 spot bitcoin exchange traded (ETFs) funds that were approved by the US Securities and Exchange Commission (SEC) on 11 January 2024, Mossavar-Rahmani said this decision does not change Goldman Sachs’ stance on cryptocurrencies.
“Goldman Sachs does not believe in cryptos in general and bitcoin has no value.”
This comes as Managing Partners Group (MPG) has predicted equity markets will experience a “choppy ride” in 2024 as the higher yield market takes hold.
The international asset-management company believes the US will make rate cuts of 1.5% and 2% during 2024.
It also predicts a 0.5% cut in the UK in Q1, as the Bank of England (BoE) has the scope to cut rates to 4% by the end of 2024.
There is a bigger risk of recession for the US during the first half of 2024, MPG added.
Comments