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Investment Ideas 2022: Explore three key themes dominating markets where investors might uncover potential opportunities. Read More

November 2022

MARKET PULSE | November 2022

Macro Views


We see progress toward a soft landing in the US, as lower job openings have not driven materially higher unemployment. In China, we expect continued reinforcement of the zero-COVID policy, with reopening contingent on viable therapeutics and local immunity. Meanwhile, a colder-than-average winter could deepen the Euro area energy crisis and exacerbate recession risk, despite gas storage near 90% full. In the UK, fiscal and monetary disconnect may keep uncertainty elevated. Read More


A reacceleration of US real income growth in 2023 may keep spending growth intact, supported by positive real wage growth, continued job gains, governmental cost-of-living adjustments, and updated tax brackets. Consumer debt remains manageable even though borrowing has increased; the 30+ day delinquency rate on total loan balances are held at 2.7%, well below the historical 6.1% average. Read More


US 30-year mortgage rates have surpassed 7%, contributing to a  -28% YoY decline in housing affordability, one of the largest on record. Still, we expect a modest decline in home prices—over 90% of current outstanding 30-year fixed rate mortgages have interest rates below 5%, and adjustable-rate mortgages remain the minority. In our view, low supply and built-up home equity will likely limit price impact. Read More


US wage growth continues to be the primary determinant of sticky inflation, with wage-sensitive core services inflation now near equal to core goods inflation. Goods prices show signs of abating as an 8% appreciation in the US dollar trade-weighted index since 1Q22 has coincided with a  -1.5% decline in non-petroleum import prices. We expect further inflation relief from price declines in core goods. Read More

Market Views

US Earnings

Corporate earnings in 3Q have met consensus expectations thus far, although the hurdle is low as economic headwinds continue to mount. A stronger US dollar has weighed on S&P 500 sales growth, while sticky wage growth has limited profit margins. We believe a focus on equity dividend income and profitable growth is key, leading us to favor defensive positions. Amid a recessionary scenario, S&P 500 dividends have historically only contracted by  -1%, on median. Read More


Global credit spreads appear slightly dislocated from the macro backdrop as the market has yet to fully reflect recession risk. While technicals remain supportive, higher policy rates and real yields will likely lead US credit spreads to widen near term. We think attractive opportunities in the UK and Euro area IG markets exist at the issuer level considering the jump in yields, but still broadly prefer US IG credit given greater macro stability. Read More


Retail investors make up a majority of the muni investor base, and the group’s ownership currently sits at its lowest level in roughly a decade, largely driven by rate market volatility. Still, we think currently higher yields may draw investors back into the market. Read More


Poor market liquidity has exacerbated fundamental concerns across assets. The S&P 500 has seen 41 days of ± 2% moves compared to the long-term average of 18 days in a year. While we believe that the worst of equity market de-rating following rate surges has passed, current level of rates may invite more cross-asset competition. Read More

A Penny Saved Is a Penny Earned

The rapid interest rate reset and slowing macro growth backdrop has led equities to underperform portfolio strategic expectations. In this type of environment, we think active investing is warranted but sometimes managing losses is easier than searching for gains. In our view, losses can still do good by investors. Strategies that embed tax-loss harvesting can keep tracking error tight to the benchmark and optimize capital loss generation, ultimately improving after-tax returns and wealth planning opportunities.

Market Pulse November 2022


Tax leakage is often the prime suspect to investors leaving returns on the table. By harvesting losses, our analysis suggests that investors could have boosted after-tax returns in US equities by 60% over the last 20 years. In a market regime where every basis point counts, we believe effective portfolio management will require protecting the bottom line today more so than ever before.

Source: Bloomberg and Goldman Sachs Asset Management.

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