Links below point to Goldman's 2011 Global Economic Outlook piece published roughly a week prior to the Morgan Stanley docs posted yesterday.
GS has been criticized lately on their seemingly overly bullish outlook for local stock indices, which in this doc targets the S&P500 at approximately 1,450 by 2011 year end (currently trading at 1258.51). GDP forecasts and outlook for global growth are all certainly above the consensus, more bullish across the board. Particularly notable is the Eurozone, which has been weighted lately by news from Greece, Ireland, Spain and Portugal (all of which comprise a rather small % of overall GDP) is set at 2.0.
Price forecasts for currencies/classes are as follows:
10 year US: 3.25
10 year Germany: 3.25
…and yet as we all know and declare after every recommended trade gets posted, GS has a far from stellar performance in terms of currency trade recommendations. From a personal opinion / observation they chase the market when it comes to these calls. This research team, to my knowledge, is part of a separate group but I honestly don't know. With credit, private sector housing finally gets a mention, which has been a huge downer in terms of overall recovery. They mention the risk of a continued downtrend which could hinder consumer spending, thus company balance sheets, thus the market….and it's not just the U.S. that is of course susceptible. Round and round we go.
Click here to download the complete PDF or the image below.
December 2, 2010