/Quick Point/ – Goldman Sachs Says Sell Bonds, Buy Stocks
Paraphrasing the tag line in the old EF Hutton ad, “When Goldman Sachs speaks, investors listen.”
From The Wall Street Journal: “Goldman Says Peak in Treasurys Is Past” (By Min Zeng, Tuesday, October 5, page C-10):
“Goldman Sachs Group Inc., hitherto one of the biggest Treasury-bond bulls on Wall Street, now says the rally has seen its peak and the best trade going forward is to buy stocks, not bonds.”
…
“Mr. Garzarelli said that the 10-year note’s yield will trade at about 2.5% for the remainder of this year and then climb to 2.75% to 3% in 2011 as riskier assets outperform.
“’Equity [stocks] offers much better return opportunity than bonds going forward,’ said Mr. Garzarelli.”
Goldman Sachs is among the first Wall Street firms to announce a shifting trend, so it’s wise to listen.
