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What's Really Going On At Goldman Sachs?

The Compound and Friends

00:00

The S&P 500 Is a Shadow of Its Former Self

The S&P has been driven by valuation expansion on the expectations that lower inflation should allow for lower rates, which has yet to materialize. The bottom of consensus S&P operating earnings per share has come down over the last six months from 229 to 217. We continue to believe the combination of higher rates and our leading recession indicators will not be different this time. Although the significant lead time before recession is helping lift risk assets with a particular rotation into underperformers like the Russell 2000, Russell 1000, value and financials.

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