Goldman: "Lower Your Expectations"
In an interview on Yahoo Finance's "Opening Bid" released on the 2nd, Peter Oppenheimer, chief global equity strategist at Goldman Sachs, said investors need to temper their expectations for global stock returns. He said markets have already delivered substantial gains and that returns are expected to moderate going forward.
Oppenheimer also offered specific figures. He said returns over the next 12 months will likely be in the mid- to high-single digits in most cases, a lower level than what all regions recorded over the past 12 months.
He stopped short of suggesting that equity markets are turning down, however. As long as economic growth continues, he said, returns at that level remain relatively decent, adding that further gains are possible if the expansion persists.
The S&P 500 has climbed 12% this year through the 2nd. But analysts say the number of variables that could dampen investor sentiment is growing as the year draws to a close. The recent acceleration in U.S. Treasury yields is one prominent example. Because bond yields and prices move in opposite directions, rising yields mean falling bond prices.
Treasury Selloff Spreads Worldwide
Oppenheimer said the global selloff in government bonds has intensified to the point of putting investors of all sizes on alert. The yield on the 10-year U.S. Treasury note — the single most important interest rate in the world and the benchmark that sets prices for everything from mortgages to auto loans and credit cards — has reached its highest level since 2023, he said.
The bond selloff is not confined to the United States and appears to be spreading to other major economies. Japan's 10-year government bond yield topped 3% during trading on the 2nd, its highest level in about 30 years, or since 1996. Britain's 30-year yield rose to around 5.92% intraday, the highest since 1998. German and French 10-year yields also climbed to their highest levels since 2011 and 2008, respectively.
