Central banks are relentlessly raising interest rates to curb inflation – even at the expense of economic growth – sparking fears of a recession. Goldman Sachs said it believes the US is preparing for a “light landing. The bank’s chief Europe economist Jari Stehn expects Europe to slip into recession this quarter due to rising energy prices.” This recession is likely, he added: “Concerns about inflation and a tightening labor market have kept investors focused on the effects impact on the rate of increase and the risk of recession. He added that the macro picture is arguably more challenging than in the past.” For Europe, Goldman strategists Peter Oppenheimer and Sharon Bell said consensus earnings-per-share estimates for Europe. The Stoxx 600 “has yet to fall,” with the pair expecting earnings per share to fall 10% by European standards in 2023. Profits, too, are at “all-time highs.” and looks vulnerable to a downgrade, Sawtell said.But there’s some good news – valuations are now close to previous lows, he added, which could signal that European stocks could bottom out. In that context, Goldman is advocating a weighted approach, which includes value sectors like banking and energy, as well as sectors that take a more defensive stance like healthcare and telecoms. The bank highlighted a number of buy-rated value stocks that trade at “depressed” multiples and are bearish for the broader market. are more optimistic than consensus on these stocks, which implies the potential for positive earnings revisions and stock re-ratings. The list includes energy companies Repsol and Eni, as well as a host of banks such as Deutsche Bank, Barclays, Lloyds and Banco Santander. Other stocks that made the list include Bayer, Volvo, Ericsson and JD Sports. Goldman also highlighted a number of buy-rated stocks the company favors in an uncertain macro environment. The list of companies with consistently positive net operating profit after tax and above market average includes ASML, Novo Nordisk, L’Oreal, Nestle and Wolters Kluwer. Goldman screened for “quality” companies with “attractive” valuations. According to the bank, these stocks have high and expanding return on investment and return on equity. The list includes low-cost carriers Ryanair, Norsk Hydro and Hannover Re. Read more Chip stocks have had a rough year – but one looks ‘really hot’, says fund manager Should you trust the recent market rally? This is how Wall Street is advising their clients to buy government bonds before the recession? That’s now an ‘outdated’ strategy, BlackRock said. Investors looking to add growth names to their portfolios can also consider Goldman’s list of high-growth stocks. “While growth is under pressure year-to-date due to dynamics in the exchange rate market, we are approaching a slower growth environment with our economists forecasting a recession in the Eurozone. Euro and UK from 4Q22. In this context, we highlight likely companies Sawtell said.Stocks include payment companies Adyen and Wise, a defense equipment maker. France’s Safran and ASM International also identified high-growth names trading at attractive valuations, including Watches of Switzerland and Standard Chartered. Asian equities think Asia for a more challenging macro backdrop in Asia, Goldman strategists, led by Alvin So, wrote on Oct. 12: “The three main macro trends are exchange rate, bullish. growth and dollar have strengthened and are putting pressure on equity performance” (Europe & US), we prioritize domestic exposure as Our economists continue to expect Asia, particularly in India and ASEAN, to deliver relatively high growth due to the post-Covid recovery and less exposure to the global economies. Consumer/domestic cyclical stocks have outperformed the global/European ratio since 2Q,” he added. The bank’s domestic cyclical cart includes several tech names China’s biggest, such as Tencent, Alibaba, Meituan and JD.com.A range of electric vehicle-related stocks also entered the basket, including Nio, Li Auto and Chinese battery maker Contemporary Amperex Technology. Goldman also screens companies with a domestic sales ratio of more than 90% and gross earnings per share growing more than 5% by 2023. This screen shows beverage makers Wuliangye and Kweichow Moutai , Indian automaker Mahindra & Mahindra, Indian conglomerate ITC and Unilever Indonesia.