Goldman Sachs (GS.US) is bullish for the first time: Financial results of the 4 major banks are approaching

According to Woofun AI, the Goldman Sachs (GS.US) strategy team has officially advised clients to increase their stock holdings. This bullish stance will face its first real test early tomorrow morning. Four major banks, including Goldman Sachs, are required to release their earnings before the market opens on Tuesday, with Goldman Sachs' own results serving as a direct litmus test for the effectiveness of its investment strategy.

Strategist Christian Mueller-Glissmann suggested that within the next three months, stock portfolio weights should be raised to "Overweight" levels, and a similar rating upgrade should be applied to bonds within 12 months. This is based on the judgment that, against a backdrop of rising oil prices and bond yields, corporate profits have not suffered despite falling stock prices. Goldman Sachs predicts that companies' earnings performance will exceed the S&P 500's forecast of 25% growth for its component stocks this quarter, and believes that improving valuations, robust profitability, and easing inflation will support the market through to 2027.

Woofun AI's compiled data show that although the S&P 500 is near an all-time high, Barclays (BCS.US) points out that more than half of its constituents are still at least 20% below their peak prices; currently, 84% of the component stocks are trading at least 10% below their all-time highs. By sector, real estate is seeing the steepest pullback, with 97% of stocks down more than 10%, followed by materials at 96%, utilities at 94%, and consumer discretionary at 92%, while energy is performing relatively well.

As for the four major banks' earnings expectations, Citigroup (C.US) and JPMorgan Chase (JPM.US) are highly favored, with analysts estimating their year-on-year earnings per share growth at 19% and 17%, respectively. In contrast, Nasdaq (NDAQ.US) consensus forecasts show lower projections for Wells Fargo (WFC.US) and Goldman Sachs, at 7% and 5%, respectively. Investor Steve Weiss said on CNBC that this quarter's results may not be perfect; banks welcome new listings but remain cautious about M&A deals due to high borrowing costs. Fund manager Jeanne Harrington emphasized that market behavior speaks louder than the actual data, and investor reactions will be a key variable.

On potential risks, interest rate pressures remain. Tom Michaud of KBW noted that bond yields are at a 24-year high, and bank stocks will continue to be under pressure until rates stabilize. The US will release inflation data on Wednesday, and this macro indicator will further influence market sentiment and subsequent trends.