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Second half of the year, the stock market hurdles which, thanks to trade tensions and rising interest rates, are likely to face a phase of increasing volatility. That's what badysts Goldman Sachs claim that companies with strong balance sheets like Facebook and NVIDIA should do well, even in tough times
"While that the trade tensions have undergone alternative phases for much of 2018, the situation has worsened in the past month.The White House has recently proposed new tariffs on imports of motor vehicles for $ 275 billion and duties for Chinese imports of $ 400 billion " said David Kostin, strategist of Goldman Sachs.
But that does not stop there …
"The rise in interest rates and the intensification of trade tensions have contributed to increase stock volatility in 2018", adds Kostin . "The yields of US Treasuries at 10 years ago rose 44 basis points to 2.85%, and our economists expect that they will continue to grow at 3.25% by the end of 2018 "
The Federal Reserve has already raised rates twice this year and investors expect at least a rate hike before the end of the year. According to Kostin, however, the Fed could tighten its monetary policy much more quickly than the market is planning to do by 2019.
"The Fed Funds futures market estimates only three new rate hikes until the end of 2019 compared to the expectations of our economists for 6 increases " he added.
In this context, however, there are good investment opportunities like Chipotle Mexican Grill, Intuitive Surgical, Facebook and NVIDIA. All the shares that, according to the investment bank, are expected to grow in the second half thanks to a solid balance sheet capable of supporting higher borrowing costs. This year, all these stocks outperformed the S & P 500 Index, posting gains of more than 10%
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