Goldman Sees US Stocks Lagging Asian, European Peers Through Next Decade: Report

• Oppenheimer and his team expect the S&P 500 index to deliver returns of 6.5% over the next 10 years, which is the weakest compared to Europe, Asia, and Emerging Markets.
• The strategists expect Europe to grow at an annual rate of 7.1%, Japan at 8.2%, Asia excluding Japan at 10.3%, and Emerging Markets at 10.9% over the next decade.
• In an October note, Goldman analysts forecast a rally through the end of 2025 in emerging market equities.

Goldman Sachs strategist Peter Oppenheimer and his team reportedly expect U.S. stocks to lag behind their peers in Asia and Europe over the next decade.

According to a Bloomberg report, Oppenheimer and his team recommended diversifying beyond the U.S. The firm said in a recent note that the elevated valuations of U.S. equities have put a lid on potential gains.

S&P 500 To Grow The Slowest

Oppenheimer and his team expect the S&P 500 index to deliver returns of 6.5% over the next 10 years. This is the weakest among the U.S., Europe, Asia, and Emerging Markets, according to the note.

The strategists expect Europe to grow at an annual rate of 7.1%, Japan at 8.2%, Asia excluding Japan at 10.3%, and Emerging Markets at 10.9% over the next decade.

“Diversify beyond the US, with a tilt toward emerging markets. We expect higher nominal GDP growth and structural reforms to favor EM, while AI’s long-term benefits should be broad-based rather than confined to US technology,” the strategists said in the note.

Bullish On Emerging Markets

In an October note, Goldman analysts forecast a rally through the end of 2025 in emerging market equities, building on the momentum from nine consecutive months of gains during the year.

“The US dollar ‘will likely stay on the back foot’ relative to emerging markets currencies amid a softening US labor market and a potential increase in investment flows into EM stocks and bonds as investors diversify away from the dollar,” the firm said in its note.

It added that a weakening U.S. dollar could boost flows in emerging markets equities as investors hunt for better returns outside the United States.

The U.S. Dollar Index has declined more than 6% year-to-date.

Meanwhile, U.S. equities gained in Wednesday’s pre-market trade. At the time of writing, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was up 0.37%, the Invesco QQQ Trust ETF (QQQ) gained 0.65%, while the SPDR Dow Jones Industrial Average ETF Trust (DIA) rose 0.24%. Retail sentiment around the S&P 500 ETF on Stocktwits was in the ‘bullish’ territory.

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