Like every year, 2016 has kicked off with many articles published about what experts and economists believe is likely to occur financially during the coming year.
One such outlook has been produced by Goldman Sachs Asset Management (GSAM) division and is titled the 2016 GSAM Outlook. This document addresses the key themes and views for the coming year based on information gathered from Goldman Sachs investment professionals from across the globe. They delve into the trends, themes and cycles that they believe will have important investment implications during 2016.
They key views included in this outlook are as follows:
Stay tuned for a long expansion – belief that the world’s major economies can grind out another year of modest growth in 2016. Rising debt loads in the US corporate sector and emerging markets can create security specific risks, however they are not perceived to be a global growth risk for 2016.
Divergence gets disruptive – The global monetary policy backdrop has suppressed volatility over the last few years, but is likely to be less predictable in 2016, increasing the possibility of policy related volatility spikes.
China’s slowdown shouldn’t detail emerging markets – After a turbulent 2015 we expect china to remain a source of market volatility, but for policymakers to prioritise growth and stability. It is also expected that the impact of China’s economic transition to become more nuanced across emerging economies.
Fresh strategies for discerning returns – another year of modest market returns is expected in equity and fixed income, underscoring the potential roles of high-conviction views, alternative strategies and focused security selection.
Each of the views above is explained detail in the full version of the 2016 GSAM Outlook. Also addressed is the Economic Outlook for 2016 by key region. Overall the macroeconomic outlook for 2016 is broadly favourable – a continuation of low but positive global growth, let by the developed economies, and a moderate pickup in inflation.
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