Did Goldman Just Do It Again?

For anyone who managed to avoid Goldman's "can't miss" recommendation and get short the EURUSD two weeks ago ahead of the ECB's stunning disappointment which sent the pair soaring and crushing virtually every macro hedge fund and FX trader, Goldman's Asset Management group has another recommendation just for you.

In case the fine print is a little too small, here it is in normal font:

High Yield & Bank Loans: We have increased our overweight in high yield.

Why?

  • High yield returned -1.53% over the week, with spreads widening by 23bps, driven by underperformance in energy-related markets. Bank loans returned -0.27% and European high yield returned -0.58%.
  • High yield funds experienced $398mn in inflows over the week, while loan funds saw $387mn in outflows.
  • High yield primary market activity increased over the week, with eight deals pricing for $4.1bn. Bank loan new issue volumes fell, with nine deals pricing for $2.3bn.

 

Here is one simple explanation of what Goldman suggests you do:

Here is another: buy everything that Goldman has to sell. Confused: see Abacus.

h/t @insidegame