Gold Magazine January - February 2014, Issue 34

COVER STORY GOLDMAN SACHS’ TOP TEN MARKET THEMES FOR 2014. Goldman Sachs’ economic team published its Top Ten Market Themes for 2014. The 10 points “represent a broad list of macro themes from our economic outlook that we think will dominate markets in 2014.” They are as follows 1. SHOWTIME FOR THE US/DEVELOPED MARKET (DM) RECOVERY Our 2013 outlook was dominated by the notion that underlying private sector healing in the US was being masked by significant fiscal drag. As we move into 2014 and that drag eases, we expect the long-awaited shift towards above-trend growth in the US finally to occur, spurred by an acceleration in private consumption and business investment. 2. FORWARD GUIDANCE HARDER IN AN ABOVE-TREND WORLD Despite the improvement in growth, we expect G4 central banks (Bank of England, Bank of Japan, Federal Reserve, European Central Bank) to continue to signal that rates are set to remain on hold near the zero bound for a prolonged period, faced with low inflation and high unemployment. In the US, our forecast is still for no hikes until 2016 and we expect the commitment to low rates to be reinforced in the next few months. 3. EARN THE DM EQUITY RISK PREMIUM, HEDGE THE RISK Over the past few years, we have seen very large risk premium compression across a wide range of areas. While not at 2007 levels, credit spreads have narrowed to below longterm averages and asset market volatility has fallen. Even in a friendly growth and policy environment such as the one we anticipate, this is likely to make for lower return prospects (although more appealing in a volatility-adjusted sense). In equities, in particular, the key question we confront is whether a rally can continue given above-average multiples. We think it can. 4. GOOD CARRY, BAD CARRY Our 2014 forecast of improving but still slightly below-trend global growth and anchored inflation describes an environment in which overall volatility may justifiably be lower. Markets have already moved a long way in this direction, but equity volatility has certainly been lower in prior cycles and forward pricing of volatility is still firmly higher than spot levels. In an environment of subdued macro volatility, the desire to earn carry is likely to remain strong, particularly if it remains hard to envisage significant upside to the growth picture. 5. THE RACE TO THE EXIT KICKS OFF 2013 has already seen some Emerging Market (EM) central banks move to policy tightening. As the US growth picture improves – and the pressure on global rates builds – the focus on who may tighten monetary policy is likely to increase. The market is pricing a relatively synchronised exit among the major developed markets, even though their recovery profiles look different. Given that the timing of the first hike has commonly been judged to be some way off, this lack of differentiation is not particularly unusual. But the separation of those who are likely to move early and those who may move later is likely to begin in earnest i

Gold Magazine January - February 2014, Issue 34 | страница 24