Goldman predicts that these three market sectors will be leading by the end of 2025, suggesting investments in them
In recent times, the stock market has been reaching new highs, a development that has sparked concerns about a potential bubble. However, amidst this uncertainty, Goldman Sachs analysts are offering a glimmer of optimism for certain sectors.
The first area of interest for Goldman is the stocks of alternative asset managers. According to their analysis, these companies could benefit significantly from lower interest rates and increased demand for credit. The easing pressure on balance sheets and the potential boost in profitability are reasons for this optimism.
Goldman's commodities strategists expect the gold price to rise 14% by 2026. This strong price performance in recent months has fueled optimism about gold mining stocks. Analysts recommend Barrick Mining and Newmont as investment targets in this sector, anticipating they will rise with the same momentum as the gold price.
The Fed's policy easing has contributed to the rise in stocks with high variable interest debt exposure. In fact, a basket of stocks with such exposure has risen 13% since early August. Goldman analysts see potential growth in these companies, particularly in the context of upcoming rate cuts.
Equity issuance is up 23% year-over-year, according to Goldman Sachs. This trend, coupled with the growth in capital markets and the broader economy, makes certain sectors attractive, according to analyst David Kostin. He believes the area could be particularly appealing due to optimism about financial deregulation, which could benefit alternative asset manager stocks.
The impact of tariffs remains uncertain, but Goldman analysts are optimistic about gold mining stocks. The spot gold price has increased by 37% year-to-date, a trend that suggests continued growth in this sector.
In a more general context, Goldman analysts recommend investors to focus on three areas for US equities through 2025. While the job market is slowing, the firm advises careful consideration of companies with high variable interest debt, as they could potentially offer promising returns.
In a somewhat unusual comparison, Goldman analysts have compared the price trajectory of gold to that of Manhattan real estate. This analogy underscores the potential for significant growth in the gold market, particularly in the context of economic uncertainty.
However, it's important to note that the easing pressure on balance sheets and potential boost in profitability are reasons for optimism, not guarantees of success. As always, investors are advised to conduct thorough research and consider their risk tolerance before making investment decisions.
