A solid US jobs report at the end of the week could spur a rotation from the market’s most profitable names into stocks with weaker earnings, according to Goldman Sachs Group Inc. strategists.
A strong Labor Department jobs print on Friday could prompt some investors to “price lower odds of substantial labor market weakening,” leading them to “rotate out of expensive ‘quality’ stocks into less-loved lower quality firms,” the team led by David Kostin wrote.
US equities have returned to record highs as investors bet the economy can avoid a recession, supported by looser monetary policy. The nonfarm payrolls report is the main focus for markets this week, and is expected to show a healthy, yet moderating, labor market.
Bloomberg’s factors-to-watch analysis shows that a so-called quality strategy, that sees investors target the most profitable equity names, has been among the top five best-performers in the US this year.
Morgan Stanley’s Michael Wilson also flagged recently that the labor market will be a bigger driver of stocks than the outlook for interest rates. In a note on Sunday, the strategist reiterated his preference for large-cap stocks and higher-quality sectors.
As Goldman Sachs tightens rules on event contract trading, RIAs and hedge funds are weighing their own policies
Meanwhile, Wells Fargo lures defectors from UBS and JPMorgan to expand in the East Coast, while another bank aligns itself with RayJay's financial institutions division.
New research suggests AI-exposed workers over 55 are leaving jobs more often than before ChatGPT’s rise.
Agentic AI is landing in trading, treasury and wealth management roles across major banks, with advisory functions as the next frontier.
Wells Fargo affiliate and women-focused wealth firm both promote leadership as they scale advisor support.
Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains
Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income
