Source: Investing Published 01/20/2025, 15:29
Peter Oppenheimer, chief global equity strategist at Goldman Sachs Group Inc., shared his view on the current state of the stock market during a television interview with Bloomberg.
He expressed his view that stocks in general are “almost fully valued” and stressed the importance of diversification in an investment climate where valuation expansion is not expected to be the main driver of growth.
Oppenheimer highlighted his preference for geographic diversification, although he acknowledged that Europe currently has the lowest earnings growth prospects. However, he specified that some sectors within the European market are “very cheap.”
He expressed a positive view of the healthcare sector and pointed to the unusual but positive performance of the mix of U.S. technology and European banks, emphasizing the benefits of diversification.
The strategist also mentioned that Goldman Sachs Group Inc. is overweighting both stocks and bonds. Within the stock market, he advised investors to expand their exposure to the US beyond the seven major technology companies, commonly referred to as the MAG 7, which include companies such as Apple, Amazon and Google.
While these companies are expected to continue to generate good returns, Oppenheimer warned that the risks associated with them are increasing.
Looking ahead, Oppenheimer expects an increase in M&A activity, driven by a recovery in the “animal spirit” in the US and a more accommodating attitude towards consolidation in Europe. He pointed to the exceptional strength of the US dollar, which continues to rise, making European and UK assets, some of which are very attractively priced, more attractive to US buyers.
In addition, Oppenheimer expects an increase in initial public offerings and private equity activity. He noted that these companies are likely to sell assets they have been holding, given current market conditions.
