“There is no margin for error in either equities or fixed income” after the surprising resilience of the US market this year, Abby Joseph Cohen, the long-serving strategist at Goldman Sachs, tells Barron’s.
Cohen has been known for consistent bullishness on stocks during most of her four-decade career at the investment bank, but sounds more cautious today. Much of the recent strength is simply due to the Federal Reserve “using monetary policy … to backstop the equity market”, she suggests. Investors are willing to look past a difficult year in the hope of better times by the end of 2021, but “valuation models suggest that the good news is already priced into the S&P500”.
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