Passing the Baton to the Global Consumer

“Central banks, governments and corporations are ready to pass the baton to global consumers—will they take it and run?” - By Goldman Sachs Asset Management

Below summary by Anthony O'Brien

Five and a half years into the bull market, many stock markets are achieving record highs while volatility is hovering around the lowest levels in years.

Have market participants become complacent? Goldman Sachs doesn’t think so. In fact, the US i-bank believes the impressive milestones are making many investors nervous.

In its view this edginess is unfounded as equities continue to look attractive in light of the potential for accelerating revenue and earnings growth, along with their return potential against other asset classes. Goldman Sachs is predicting that global equity returns this year will be similar to average historical returns of about 8-10%.

Goldman Sachs believes that a combination of an improving macroeconomic environment combined with growth spending, structural reforms and improved consumer spending will drive equity returns.

Yet in the last couple of years, consumers in both developed and emerging markets have been relatively subdued.