Goldman Sachs Sees Global Stocks Slowing Amid Higher Yields and Oil Prices

Goldman Sachs' chief global equity strategist, Peter Oppenheimer, expects lower returns for global stocks over the next 12 months. He forecasts that most major markets will see gains of around 5% to 9%, which is a significant slowdown from last year's performance.

The S&P 500 has already risen about 12% this year, and Oppenheimer notes that 'solid gains have already been booked.' He attributes the expected lower returns to rising government bond yields and higher oil prices.

Higher government bond yields make fixed income more attractive, while weighing on equities. Corporate funding costs rise, and the discount rate applied to future corporate earnings increases, making it harder to justify elevated valuations of growth stocks.