Market Insights

MARKET STRATEGIST INSIGHTS 1 of 2

PORTFOLIO MANAGER INSIGHTS 2 of 2

Market Strategy

Complex markets can be difficult to decipher. We provide investment professionals and their clients with a global perspective to help explain the issues and trends affecting their portfolios.

Chart of the Week

An Outcome is Income

In our view, US aggregate real incomes will meaningfully rise by 3.75% in 2023, driven by continued job gains, positive real wage growth, above-normal cost of living adjustments, normalizing effective tax rates, and higher interest income. That said, these factors skew toward benefitting higher-income households that have a lower propensity to spend, suggesting the translation from real income growth to real spending growth may be more muted than normal.

Source: GS Global Investment Research and GS Asset Management.

Market Know-How

Crunch Time

The promising start to 2023 has benefitted from the reduction in acute European energy risk and strong Chinese economic momentum in reopening. Recent data trends have strengthened the global “soft landing” narrative, though good news remains a double-edged sword. Resilient growth may potentially invite additional rate hikes and threaten to elongate the economic adjustment that began last year. Consequently, the evolution of the growth-inflation mix and commensurate monetary responses remain our prevailing risk in 2023.

2Q2023 Themes

1Municipal Bonds: Staying Local

2International Equity: Near-term Catch

3Private Credit: Giving Credit to Private Credit

GSAM Connect

March 22, 2023

Labor and Inflation from Top to Bottom

What would it take to tame inflation? More economic slack and higher unemployment perhaps, but that may only solve part of the problem. In our view, monetary tightening is most effective for addressing the cyclical aspects of demand-driven inflation. Under the hood, there are also structural issues that may keep inflation sticky, such as a mismatch between labor supply and demand and the collective bargaining power of workers. Learn more in our latest monthly Observations.

February 15, 2023

Short-Term Pain for Long-Term Gain

Given the Federal Reserve's focus on bringing down wages and bearish business outlook from corporations, we expect continued weakness in wage growth and declining share of labor compensation in GDP going forward. As we discuss in our latest Macro and Market Observations, while such developments are likely to dampen consumption and hurt growth in the near term, the redistribution of growth from labor to capital should incentivize firms to boost capital investments, and we believe will be positive for risk asset performance over the medium to long-term.

February 08, 2023

Managing Risk with Managed Futures

Stocks and bonds may exhibit more volatility going forward as investors grapple with multiple headwinds, including stickier inflation, supply chain realignment, geopolitical tension, deglobalization and energy insecurity. A Managed Futures – also commonly known as Trend-Following – strategy may help temper the effects of ongoing market gyrations. Learn why we believe a Managed Futures strategy can be a powerful risk diversifier, even at a modest allocation within a portfolio.

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More Market Strategy

March 2023

Monthly Market Pulse: March

Fading inflation, resilient growth, and a return of cyclicality has finally led US small cap equities to make a big splash on its year-to-date performance. We think this clearer US macro backdrop has presented a path for earnings and valuation to recover more swiftly for smaller US companies relative to larger ones. Still, with recession risk unresolved, we believe active selectivity remains paramount for investors re-establishing strategic weights while going down-in-cap.

January 2023

10 for 2023 Special Edition Market Pulse

This past year saw a rapid economic deceleration, with inflation prevailing as the dominant global concern. Russia’s invasion of Ukraine amplified supply chain disruptions, and interest rates rose to a level not seen since the Global Financial Crisis. In the stream of so many headlines, many macro and market events may be hard to recall or believe. Looking ahead to 2023, we closed the 2022 chapter with a year-end review.

December 2022

Point Break

Inflation continues to be the dominant global concern, even in a world of complex geopolitical dynamics that include military conflict in Ukraine, territorial flexing by China, and entrenched societal polarization. We expect the evolution of inflation and commensurate central bank responses to remain the prevailing theme in 2023. While waiting for the wave to break, however, investors must learn to surf.

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Asset Class Views

Access the latest views from our product teams on macro strategies and browse insights by key topics, such as equities, fixed income, money markets and alternatives.

March 31, 2023

Global Fixed Income Weekly: MusinGS

In this weekly insight, we bring the global economy and fixed income markets to you. Macro at a Glance covers the latest developments in growth, inflation, and labor markets, while Policy Picture and Central Bank Snapshot details our outlook for monetary and fiscal policies. Fixed Income Navigator summarizes how our view of the world and financial markets informs and impacts our investment views.

GOLDMAN SACHS RESEARCH

Follow trends in the global economy, including policy issues and analysis of economic development from Goldman Sachs Global Investment Research.