According to Goldman Sachs’ Weekly Kickstart note, there are three big things that Goldman Sachs clients ask about:
Three questions dominated our investor dialogue this week given the lack of meaningful data releases. (1) Interest rates: The recent decline in ten-year US Treasury yields to 2.6%, the forward path of interest rates, and implications for equity valuation; (2) Capex: the outlook for corporate capital spending in 2014; and (3) Rotation: The potential for the momentum drawdown of the past two months to reverse and vault high expected sales growth companies back into a market leadership position.
As for answers, Goldman says there’s no “precise” answer to the big drop in Treasury yields, though it’s consistent with declining growth and inflation expectations.
On question number 2, Goldman does anticipate Capital Expenditures (CAPEX) accelerating, with growth of nearly 7% this year.
And as for the final question, Goldman doesn’t anticipate those old momentum darlings to resume leadership after they have been sold off so hard. Once a stock loses momentum, it’s hard to get it back.
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