29 September 2025 | 5:56AM BST Portfolio Strategy Research GOAL: GLOBAL OPPORTUNITY ASSET LOCATOR Goldilocks continues to escape the bears - modestly pro-risk, OW equities/UW credit This report is intended for distribution to GS institutional clients only. Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification and other important disclosures, see the Disclosure Appendix, or go to www.gs.com/research/hedge.html. Goldman Sachs GOAL: Global O ...

Core Viewpoint - The article discusses the current state of the stock market, highlighting that Goldman Sachs has raised its outlook for global equities due to strong earnings and a Federal Reserve easing cycle, with a bullish target of 7,000 for the S&P 500 by year-end [1][5][7]. Market Performance and Outlook - The rally in the stock market is attributed to recovering earnings, and it is expected to continue as earnings accelerate, with a projected growth of 8 to 10% into the next year [4][6]. - The target of 7,000 for the S&P 500 is seen as potentially conservative, with expectations that the market could exceed this level before stabilizing [8]. Investor Sentiment and Cash Reserves - There is a significant amount of cash on the sidelines, which could contribute to market performance, especially in the fourth quarter, following a strong first nine months of the year [9]. - Historical data indicates that when the market is up 15 to 20% in the first three quarters, the average return in the fourth quarter is approximately 5.6% [10]. Economic Conditions and Fed Policy - The concept of a "Goldilocks" environment is discussed, where interest rates remain steady, and both earnings and GDP growth are positive, although there are concerns about current valuations compared to historical averages [11][12]. - The Fed's actions regarding interest rates are crucial, as aggressive cuts could lead to inflationary pressures, impacting market stability [13][22]. Future Projections - The market is expected to enter a phase of moderate growth, with returns projected to be in the high single digits to low double digits, aligning with historical averages [16][22]. - The Fed's credibility with the market is emphasized as a key factor for future performance, particularly in light of persistent inflation concerns [22][23].

talk. It does take us to our talk of the tape. The risks and rewards of buying stocks at record highs.Goldman Sachs just upping its view of global equities today thanks to strong earnings and a Fed easing cycle. Our next guest bumping up his own outlook as well. Brian Bellski is BIMO's chief investment strategist.He's here with us at Post 9. It's good to see you. Uh, welcome.So, we obviously watching the president and uh, uh, Benjamin Netanyahu at the White House. We're trying to figure out what's going on ...

Core Viewpoint - The article discusses the investment position of the analyst, indicating a beneficial short position in SPX shares, which suggests a bearish outlook on the stock's future performance [1]. Group 1 - The analyst has a beneficial short position in SPX, indicating a strategy that profits from a decline in the stock price [1]. - The article expresses the analyst's personal opinions and does not involve compensation from any company mentioned [1]. - There is no business relationship between the analyst and any company whose stock is discussed, ensuring an independent viewpoint [1]. Group 2 - The article emphasizes that past performance does not guarantee future results, highlighting the inherent uncertainty in investment outcomes [2]. - It clarifies that no specific investment recommendations are provided, leaving the suitability of investments to individual investors [2]. - The authors of the article include both professional and individual investors, some of whom may not be licensed or certified, indicating a diverse range of perspectives [2].

Investment Rating - The report maintains a tactical Neutral (N) rating for equities over a 3-month horizon and an Overweight (OW) rating for equities over a 12-month horizon [5][9]. Core Insights - The current market sentiment has shifted towards a 'Goldilocks' narrative, characterized by a resilient macro backdrop and expectations of dovish monetary policy, despite potential headwinds from tariffs and a mixed growth/inflation outlook [4][15]. - The report identifies three potential risks ('bears') for the second half of the year: a significant negative growth shock, a large rate shock affecting long-duration bonds, and a deepening bear market for the Dollar [5][62]. - There is an emphasis on diversification across asset classes and regions, with specific recommendations for shorter-duration bonds, low volatility stocks, infrastructure, Gold, financials, and selective emerging market exposure [5][63]. Summary by Sections Market Sentiment and Risk Appetite - The Risk Appetite Indicator (RAI) has rebounded to somewhat bullish levels after a rapid re-risking phase, indicating a shift in investor sentiment towards riskier assets [4][27]. - Despite the bullish sentiment, the report warns of elevated valuations and a modestly negative asymmetry for equities in the near term, suggesting a higher probability of drawdowns compared to rallies [47][52]. Asset Allocation Strategy - The report recommends a tactical asset allocation of Overweight in cash and equities, Neutral in bonds and credit, and Underweight in commodities for the next 3 months [5][7]. - For the 12-month horizon, the strategy remains Overweight in equities and Neutral in cash, credit, and bonds, while continuing to Underweight commodities [5][7]. Economic Outlook - The macroeconomic environment is expected to face challenges in the second half of the year, with a deteriorating growth/inflation mix primarily driven by tariff impacts [15][67]. - The report highlights that while hard data has shown some negative surprises, the labor market remains resilient, and inflation pressures have not significantly materialized [19][67]. Sector and Asset Class Insights - The report suggests that equities may face headwinds from potential tariff impacts and a slowdown in corporate profitability, particularly in the US [66][71]. - Gold is highlighted as a key safe haven asset, with price forecasts raised to $3,700 per ounce by the end of 2025, supported by strong central bank buying [13][71]. Diversification Opportunities - The report emphasizes the importance of diversification in multi-asset portfolios, particularly in light of the current market dynamics and potential risks [58][62]. - Specific diversification strategies include focusing on shorter-duration bonds, quality stocks, and safe-haven assets like Gold and the Swiss Franc [71][82].

Investment Rating - The report does not explicitly provide an investment rating for the industry. Core Insights - The interplay of policy uncertainty and business cycle dynamics is crucial, with significant influences from US policy shifts in trade, immigration, fiscal, and regulatory domains affecting market sentiment [9]. - The complexity and uncertainty surrounding the global macroeconomic landscape are expected to persist in the second half of 2025, with various potential scenarios outlined for market performance [12][15]. - A US recession is not the baseline scenario, but risks remain elevated, with a potential for 100 basis points of Fed cuts between December 2025 and spring 2026 [15][24]. Summary by Sections Economic Outlook - The substantial shift in US trade policy has led to a forecasted downshift in global growth and a rotation in inflation pressures towards the US, with recession risks placed at 40% [17]. - The US GDP growth outlook has been revised down from 2.0% to 1.3% for the year, with core PCE inflation expected to reach 4.6% in Q3 and 3.4% by year-end [21]. Equities - The outlook for US equities suggests narrow market leadership and high concentration, with a potential for new highs absent major policy or geopolitical surprises [25][26]. - International equities are expected to trade favorably, with a rotation into international markets likely to continue, supported by USD weakness [26][27]. Rates - Long-end yields are expected to remain stable, with a forecast for 2-year and 10-year yields to end the year at 3.50% and 4.35%, respectively [30][31]. - The Treasury market's rapid growth has outstripped demand, leading to a potential increase in term premium over time [30]. Credit - High-grade credit remains supported by high yields and good corporate earnings, with spreads expected to remain tight [35][36]. - High-yield bond spreads are forecasted to widen by about 100 basis points to 450 basis points by year-end 2025, with a default rate expected to rise to 2.75% in 2026 [38][39]. Commodities - Oil prices are anticipated to trade in the low-to-mid $60 range for the remainder of 2025, with geopolitical tensions potentially causing short-term spikes [43][44]. - Gold prices are projected to reach an average of $3,675 per ounce by Q4 2025, supported by strong demand amid economic uncertainties [45].