A senior Goldman Sachs Asset Management executive says the recent slowdown in one of the market’s most important trades may be creating exactly the kind of entry point that investors have been waiting for.
In a new Bloomberg interview, Greg Calnon, global head of public investing at Goldman Sachs Asset Management, outlines a bullish economic backdrop that he says supports continued momentum in corporate earnings and risk assets more generally.
“The economy in the US continues to do quite well. We’ll have 2% GDP growth this year. We have a Fed that’s expected to cut two more times throughout the rest of the year. And so the economy is generally doing pretty well.
The big driver is the corporate sector and corporate earnings more generally. It’s expected that we’ll have 12% earnings growth this quarter, which will be the sixth consecutive quarter of double-digit earnings growth. That is real momentum in the corporate market. We also have record buybacks. We have 100% increase in M&A volume. There’s a lot of momentum within the corporate sector.”
Against that backdrop, Calnon says it might be time to re-enter the AI trade.
“Many clients are asking if there’s actually been less of an acceleration within the AI tech trade over the last couple of months, and maybe this is an opportunity to reenter. If 40% of S&P earnings are coming from AI infrastructure investment more generally, there’s more room to run here.”
On the macro risks that could disrupt the outlook, Calnon points to the geopolitical situation as the key variable the market is watching most closely.
“The obvious big risk is, does this ceasefire hold? Does the Strait reopen within a couple of weeks? But if it does, which is what the market is pricing in, then I think you can see some calm be restored back to the markets.”
Disclaimer: Opinions expressed at CapitalAI Daily are not investment advice. Investors should do their own due diligence before making any decisions involving securities, cryptocurrencies, or digital assets. Your transfers and trades are at your own risk, and any losses you may incur are your responsibility. CapitalAI Daily does not recommend the buying or selling of any assets, nor is CapitalAI Daily an investment advisor. See our Editorial Standards and Terms of Use.