Goldman Sachs is Optimistic About the US Economy Rebounding in 2020

Goldman Sachs believes the U.S. economy is poised to snap back and certain stocks could have the most upside from the economic recovery.

Cyclical stocks, those typically tied to economic growth, have led the record-setting rally in the past three months. While the S&P 500 surged about 8% during the period, cyclical stocks have outperformed their defensive counterparts, returning 12%, Goldman said. The bank predicts the leadership will persist on the back of a rebound in U.S. economy.

“The equity market is anticipating an acceleration in US economic growth during the coming months,” David Kostin, Goldman’s chief U.S. equity, said in a note on Friday. “Investors who want to capture further cyclical upside can improve risk-reward by narrowing their focus to select cyclical stocks.”

Goldman screened Russell 1000 stocks for names with high economic sensitivity but still-depressed valuations. The bank found 24 stocks that could outperform the market and other cyclicals if economic growth continues to improve. These stocks include CBS, Snap-On, Kohl’s, Urban Outfitters and TCF Financial.


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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza