The United States executive of Goldman Sachs Asset Management said on Tuesday that the U.S. economy is expected to grow at a slower rate of around 2% in the second half of 2024. At the same time, due to declining earnings growth and political concerns, stock indices are expected to remain flat.
Goldman Sachs Asset Management (GSAM) mentioned in its mid-year outlook that this has made the investment environment more complex, but there are still opportunities, including a wider range of artificial intelligence stocks.
Lindsay Rosner, head of multi-sector fixed income investments at Goldman Sachs Asset Management, said, “This is definitely a soft landing. As the data comes in, this is what we are seeing.”
BlackRock, the investment management company, released its mid-year outlook through the BlackRock Investment Institute on Tuesday morning.
Rosner said investors may “indeed see” a rate cut in the second half of 2024. She expects the Federal Reserve to not start cutting rates until September, but added that once it begins, it may continue at a rate of 25 basis points every quarter.
Rosner predicted that as interest rates decline, the fixed income market will benefit. She mentioned that she sees particularly interesting opportunities in the high-yield bond market and structured loans.
The biggest trend in the U.S. stock market so far this year has been a few companies related to artificial intelligence (AI) dominating, especially semiconductor giant Nvidia.
Alexis Deladerriere, Global Equity Portfolio Manager and Head of Developed Markets at Goldman Sachs Asset Management, said, “We believe that you need to steer clear of (early winners in the AI space)” and diversify the risk exposure to this trend.
Deladerriere stated that with the overall slowdown in earnings growth and escalating domestic and global political anxieties, he expects U.S. stocks to remain largely flat in the second half of the year.
Rosner also noted, “Uncertainty can be considered the current state of affairs.”