(MENAFN- Baystreet.ca)
Goldman Sachs (NYSE:GS) stock was down 6.6% week-over-week as of close on March 25. Shares are up 13.1% in 2019 so far. However, the stock is still down 22% from the prior year.
Goldman Sachs and other major US financial stocks took a big hit late last week. This occurred after the 10-year U.S. Treasury yield curve inverted, which suggests a 25-30% chance of recession in the next 12 months. The indicator has been relatively ironclad since the early 1990s, which explains the anxiety felt by investors.
Bond markets have taken big hits globally, suggesting that bets around the world are pointed towards dovish central banks. The market chaos of late 2018 appears to have cemented a dramatic turn in policy, which flies in the face of the supposed normalization that was on the way due to the recovery. This will be tricky for Japan and Europe, which have expended much of their monetary ammunition.
The U.S. Fed still has some tools up its sleeve, including potential rate cuts and even more rounds of quantitative easing. That is good news for major U.S. banks, who have been fearful that the boon from tax reform had nearly worn off. The Trump administration has hinted its displeasure with the Fed, which means that more stimulus and lower rates could be forthcoming.
Goldman Sachs is still trading at the lower end of its 52-week range. It had an RSI of 36 as of this writing, which puts it close to oversold territory. Investors should monitor the stock closely and consider jumping in if we see more turbulence in the early spring.
MENAFN2603201902120000ID1098304259
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.