Whatâs Going On Here?Goldman Sachs is totally done with 2020: a new report from the investment bank looked at the 10 most important investment themes for 2021. What Does This Mean?Goldmanâs expecting global growth to recover in earnest next year, which should be good news for investments that are sensitive to economic activity: think commodities, emerging market investments, and cyclical stocks like energy, financials, and consumer discretionaries.
Still, Goldman warned investors not to get too carried away just because Pfizer and BioNTech have announced an effective coronavirus vaccine. The higher stocks rise, after all, the more investors will rely on future growth. And that, Goldman says, is a risky place to be: new winter lockdowns could still damage near-term economic activity, while vaccine setbacks and virus mutations might end up delaying growth â and put economically sensitive stocks through the wringer. Why Should I Care?For markets: The winners and losers.
Goldman doesnât have high hopes for the US dollar or, in the short term, for lockdown-bruised European investments. Instead, it recommends turning your attention to China, Japan, and Korea, all of which are facing a more promising growth outlook and a lower pandemic risk. The investment bankâs also sticking with its recommendation to buy gold and silver, and making the case for oil's price to rise 50% by the end of 2021.
Zooming: The battle continues.
Sorry to disappoint, but Goldman Sachs hasnât made its mind up about one of investorsâ favorite rivalries: cheap-looking âvalueâ stocks versus fast-climbing âgrowthâ stocks. While the bank thinks investors are more likely to move away from growth stocks and toward value stocks if economic growth picks up, it canât say for sure that itâll actually play out that way. There could be even more stay-at-home orders to come thatâll benefit fast-growing tech companies, while the US election outcome â which saw legislative power split between two competing parties â could ruin attempts to cut Big Tech down to size. | 