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Global equity bear market not over yet – Goldman Sachs

Goldman Sachs on Monday warned that the global equity bear market is not over as the markets are yet to see a trough in the momentum of global growth deterioration, a peak in interest rates and valuations lowered to reflect a likely recession.

November 21, 2022
21 November 2022

Nov 21 (Reuters) – Goldman Sachs on Monday warned that
the global equity bear market is not over as the markets are yet
to see a trough in the momentum of global growth deterioration,
a peak in interest rates and valuations lowered to reflect a
likely recession.

The Wall Street investment bank expects returns to be a
“relatively low” 6% through the end of 2023 as investors focus
on the pace of monetary policy tightening and the consequent hit
to growth and earnings.

“We continue to think that the near-term path for equity
markets is likely to be volatile and down before reaching a
final trough in 2023,” Goldman Sachs said in a note.

It expects the S&P 500 index to be around the
4,000-points level towards the end of 2023, implying an increase
of less than 1% from current levels, as it sees no earning
growth.

Goldman expects earnings for the constituents in the
Pan-European STOXX 600 index to slide 8% next year,
while forecasting a 3% earnings growth for companies in Japan’s
TOPIX and MSCI’s Asia-Pacific ex-Japan
indexes.

The investment bank expects investors to start to price in
expectations for a bull market next year.

“We expect markets to transition into a ‘Hope’ phase of the
next bull market at some point in 2023, but from a lower level.”
(Reporting by Siddarth S in Bengaluru)

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