US Weekly Kickstart

This report examines the implications of potential Federal Reserve rate hikes on the equity market, noting that equities historically struggle during the start of tightening cycles. Despite this, earnings growth remains a primary driver for market direction, and a dovish surprise in economic data could trigger a relief rally.

Key Takeaways

• 1.Equities typically perform poorly at the start of Fed hiking cycles, with S&P 500 generating a median return of -2% in the 3 months following the first hike.
• 2.Current market pricing of near-term Fed hikes creates a potential bullish equity catalyst if the Fed outlook shifts in a dovish direction.

Table of Contents

• What the Fed policy outlook means for equities
• Fed policy and implications for equities
• S&P 500 earnings and return forecasts
• Biggest stock moves this week
• YTD absolute and risk-adjusted returns
• Sentiment and flows
• Economic growth
• Interest rates and financial conditions
• Market breadth and concentration
• Correlation and volatility
• IPO Barometer and mutual fund performance
• Earnings growth
• Valuations
• Sector returns, earnings, and valuations
• Thematic baskets
• Factors
• Goldman Sachs global macro research cross-asset forecasts
• Disclosure Appendix

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