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Investment Ideas 2022: Explore three key themes dominating markets where investors might uncover potential opportunities. Read More
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Equities moved higher as market concerns about the Omicron variant eased after reports of potentially promising vaccine data. The week continued a stretch of large daily moves in both directions, demonstrating the multitude of factors driving markets, from monetary and fiscal policy transition to pandemic uncertainty. Ultimately, the S&P 500 rose 3.85%. Similar tailwinds propelled non-US equities, with the STOXX 600 and FTSE 100 increasing by 2.76% and 2.38%, respectively. Read More
Oil prices rebounded last week after steep declines the week before. The market continued pricing reopening, strong demand recovery, and supply deficits, despite OPEC+’s announced 400,000 barrel per day increase of monthly output. Crude stockpiles rose by 2.3 million barrels at the biggest US storage hub, the most since February. Even still, WTI and Brent rose 8.16% and 7.54%, respectively. Read More
US Treasury yields jumped last week as virus concerns abated and economic data came in strong, suggesting that the Federal Reserve may consider a more accelerated withdrawal of policy support. The 2-Year Treasury yield rose 7bps to 0.66%, while the 10-Year yield increased to 1.49%. In Europe, potential activity restrictions moderated the sovereign bond sell-off. The 10-Year German bund yield ended the week up at -0.35%. Meanwhile disappointing economic data in the UK kept 10-Year Gilt yields flat at 0.74%. Read More
The US dollar faltered last week despite economic differentials seeming to widen between the US and its global peers. The US dollar index decreased -0.11% with the euro holding at $1.1311 and the pound down to $1.3257. The Chinese yuan ended the week down -0.07% after the People’s Bank of China (PBOC) raised FX reserve requirements for the second time since June. Read More
US CPI accelerated to 6.8% YoY in November, up from 6.2% in October. Excluding the volatile food and energy components, core CPI rose to 4.9%. Beyond strong energy prices (+33.3% YoY), the increase was led by transportation (+21.1%) and housing (+4.8%). Meanwhile, China’s CPI rose by 2.3% YoY in November, up from 1.5% in October. The pass-through from producer prices to consumer prices remains limited, and we believe this higher print is unlikely to deter the PBoC from loosening policy further if needed. Read More
The PBoC unexpectedly announced a 25bps cut to the SME/agriculture sector relending rate and a 50bps cut in the RRR last week, as the government’s focus shifted to stabilizing growth. Read More
The US labor market continued to show signs of improvement, with initial jobless claims falling to a multi-decade low of 184k for the week ending December 4. However, the decline appears impacted by seasonal factors and claims rose to 281k on a non-adjusted basis. Job openings also beat expectations, increasing by 431k in October, and the quits rate fell to a still-elevated 2.8%. Read More
Source: Bloomberg and Goldman Sachs Asset Management. For style performance, Large, Mid, and Small for US Equity refer to the Russell 1000, Russell Midcap, and Russell 2000 indices, respectively. Value refers to companies with lower price-to-book ratios and lower expected growth values, and Growth refers to higher price-to-book ratios and higher forecasted growth values. For US Fixed Income, Government, Corporate, and High Yield refer to the Bloomberg Treasury, Bloomberg Corporate Credit, and Bloomberg Yield indices, respectively. Short, Intermediate, and Long refer to the Short, Intermediate, and Long segments of their respective curves. For European Fixed Income, Government, Corporate, and High Yield refer to the Bloomberg Euro Treasury Index, the Bloomberg Euro Corporate Index, and the Bloomberg Euro High Yield Index, respectively. Quality returns refers to the credit quality of asset classes ranging from Government, highest quality, to High Yield, lowest quality. Since August 24, 2021, the Barclays indices are branded “Bloomberg indices”. Please see end disclosures for footnotes. Past performance does not guarantee future results, which may vary.
US Retail Sales (Cons: 0.8%, Prior: 1.7%)
UK CPI (Cons: 4.8%, Prior: 4.2%)
US In. Jobless Claims (Cons: 195k, Prior: 184k)
US Manuf. PMI (Cons: 58.5, Prior: 58.3)
US Serv. PMI (Cons: 58.7, Prior: 58.0)
EA Manuf. PMI (Cons: 57.9, Prior: 58.4)
UK Retail Sales (Cons: 0.8%, Prior: 0.8%)
“CPI” refers to the Consumer Price Index. "In. Jobless Claims" refers to US initial jobless claims. "EA" refers to the euro area. "Manuf. PMI" refers to the Markit Manufacturing Purchasing Managers Index. "Serv. PMI" refers to the Markit Services Purchasing Managers Index. "FOMC" refers to the Federal Open Market Committee. "BoE" refers to the Bank of England. "BoJ" refers to the Bank of Japan. "ECB" refers to the European Central Bank.
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