Goldman's Case for Buying Before the Midterms
Despite the bond market's concerns about inflation and Fed rate hikes, Goldman Sachs Partner Mark Wilson believes investors should not wait for calmer conditions before adding equity risk. In his latest Weekly Mash, Wilson argues that inflation pressure may ease before the midterms deliver certainty to the market.
The current market environment has been marked by a 'live objection' from bonds, with seven consecutive months of rising 10-year yields making every equity rally harder to trust. However, Goldman expects cooling growth to reduce pressure for further hikes without breaking the earnings story.
Wilson's year-end case rests on three linked judgments: inflation pressure should fade, growth should slow without falling apart, and underlying earnings should remain stronger than the headline debate suggests. He believes that record other income and exceptional semiconductor profits deserve scrutiny, but Goldman's underlying earnings outlook remains constructive through 2027.