Goldman: U.S. stocks remain the best assets in the current economy

While the S&P 500 is trading at record levels, Goldman Sachs Group Inc. is advising its most wealthy clients that American stocks remain the best among assets.

“The main returns in our view still come from having an overweight to U.S. equities,” Silvia Ardagna, managing director in the investment strategy group within Goldman Sachs Private Wealth Management, said in an interview in London. “The U.S. has the prominence over others.”

Why? The reason is simple, according to the Goldman unit, which manages assets totaling around $500 billion.

As global growth slows, the U.S. economy continues to look robust with productivity rising and unemployment remaining low, especially compared to other wealthy countries.

U.S. payrolls showed remarkable resilience in October, according to U.S. Labor Department data released Friday, a validation of the Federal Reserve’s signal to pause rate cuts.

The reason is simple, according to the Goldman unit, which manages about $500 billion. With global growth slowing and Germany slipping into a technical recession, the U.S. economy is looking more robust in the medium-term compared to other countries. And this may just be the case as U.S. payrolls on Friday showed surprising resilience in October, validating the Federal Reserve’s signal to pause rate cuts.

Also, the U.S. and China — the world’s No. 1 and No. 2 economies, respectively — coming closer to an agreement to end their trade war is also boosting U.S. stocks.

“The de-escalation of trade tensions between the U.S. and China has triggered the question whether investors have been too negative and there could be some positive surprises,” said Ardagna, a former associate professor at Harvard University.

“If we get better economic data and there’s a stabilization in the manufacturing and the services sector remains robust, this rally can clearly extend.”

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