Goldman's Bordlemay Sees `Ping-Pong' Pattern for Stocks

• Expects continued volatility but a constructive direction for equity markets, supported by strong and broad earnings growth across sectors, regions, and market caps.
• Higher bond yields are pressuring valuations, but earnings have acted as 'armor,' and hyperscalers view AI investment returns as superior to current bond yields.
• Recommends increased diversification, focusing on quality businesses with strong balance sheets and pricing power, and exploring 'unloved' sectors like healthcare and international developed markets.
• AI leadership is dynamic; advises being nimble with investments in hardware and software, taking profits when overextended and adding back opportunistically.

Katherine Bordlemay of Goldman Sachs anticipates continued 'ping-pong of volatility' in US stocks but maintains a constructive outlook for equities. Strong and broad earnings, coupled with significant investment in AI, are seen as key drivers cushioning the market from rising yields. She advises investors to diversify, focus on quality businesses, and consider 'unloved' sectors and international markets.