Goldman Sachs digs for year-end "Alpha": Focus on these three sectors as the U.S. job market slows down
Goldman Sachs analysts recommend that investors focus on three key areas: alternative asset management companies, companies with significant floating-rate debt, and gold mining stocks. With the slowdown in the U.S. job market and expectations of interest rate cuts, these areas may have growth potential. Goldman Sachs expects that stocks of alternative asset management companies will benefit from increased capital market activity, while stocks of floating-rate debt companies may improve profitability due to interest rate cuts. Gold mining stocks are also favored due to rising gold prices
According to the Zhitong Finance APP, as summer comes to an end, investors are looking for clues about the year-end market. Analysts at Goldman Sachs believe that investors should focus on three key areas. They see growth potential in alternative asset management companies and firms with significant floating-rate debt.
As summer is about to end, the U.S. labor market is slowing down, the impact of tariffs remains uncertain, and the continuous highs in the U.S. stock market have raised more concerns about bubble formation. Against this backdrop, Goldman Sachs analysts have provided some advice for investors approaching year-end.
Goldman Sachs suggests focusing on three areas in the market
In a report dated September 5, Goldman Sachs outlined its U.S. stock investment strategy through the end of 2025 and recommended that investors concentrate on three areas.
First, Goldman’s analysts suggest that investors consider investing in stocks of other types of asset management companies. According to Goldman analyst David Kostin, this sector may be quite attractive because, unlike bank companies, the valuations of these firms have never rebounded to the high levels seen after the elections.
Kostin stated that Goldman expects stocks in this sector to benefit from increased capital market activity and overall economic recovery, as well as from expectations of regulatory easing in the financial industry. He noted that the volume of stock issuances is increasing, up 23% year-on-year.
Second, analysts believe that stocks of companies with significant floating-rate debt have substantial investment potential. They pointed out that the upcoming interest rate cuts could alleviate balance sheet pressures and improve profitability.
The report noted, "Since early August, stock portfolios containing a large number of floating-rate bonds have risen by 13%, while the Federal Reserve's policies have also become more dovish."
The bank also pointed out that these stocks are likely to receive further benefits from the "Big and Beautiful Act," which allows for more interest deductions from taxes.
Third, Goldman’s analysts are also optimistic about gold mining stocks, noting that gold prices have continued to rise in recent months, with spot gold up 37% year-to-date.
The analyst team stated, "Our commodity strategists expect gold prices to rise by 14% by 2026 due to strong demand from central banks and exchange-traded funds (ETFs)." They also indicated that gold mining stocks are expected to rise with the same upward momentum.
