The recent rally that’s pushed equities to all-time highs is about to hit a speed bump, according to a new note from Goldman Sachs Group Inc. In fact, the team, led by Christian Mueller-Glissmann, expects the S&P 500 and the STOXX Europe 600 to fall roughly 10% over the next three months, Bloomberg reported. “Given equities remain expensive and earnings growth is poor, in our view equities are now just at the upper end of their ‘fat and flat’ range,” they write. The analysts are downgrading stocks to ‘underweight’ for the next three months, while keeping their ‘neutral’ position over the next 12 months and staying ‘overweight’ in cash.
