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March 26, 2010 United States: Portfolio Strategy
Goldman Sachs Global Economics, Commodities and Strategy Research 3
The charts we are watching: A look back and look ahead at dividend policy and growth
Exhibit 1: Top dividend tax rate expected to rise to 28.8% in 2013
as of March 25, 2010
Exhibit 2: Effective dividend yield declines as tax rate increases
as of March 25, 2010
Source: Treasury Department. Source: Treasury Department, Compustat, and Goldman Sachs Global ECS Research.
Exhibit 3: Goldman Sachs top-down earnings and dividend estimatesas of March 25, 2010
Exhibit 4: Dividend swap market pricing in faster near-term growthas of March 24, 2010
Source: Compustat and Goldman Sachs Global ECS Research. Source: Compustat and Goldman Sachs Global ECS Research.
0
10
20
30
40
50
60
70
80
90
100
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
2020
2025
T
axRate(%)
Long-TermCapital Gains
Tax Rate
TopDividendTax Rate
15%
29%
GS Estimate(includes 3.8%
Medicare surcharge)
0%
1%
2%
3%
4%
5%
6%
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
2020
2025
Dividen
dYield(%)
1.4%
2.0%
Dividend Yield
Effective Dividend Yield(tax-adjusted)
2.0%
1.7%
Operating EPS DPS
2009E 2010E Growth 2009 2010E Growth
Consumer Staples $9 $9 4 % $3.69 $3.96 7 %
Information Technology 10 11 7 1.89 2.02 7
Consumer Discretionary 5 5 5 1.51 1.62 7
Materials 1 2 69 0.71 0.74 4
Utilities 3 3 15 1.75 1.82 4Energy 5 10 93 2.70 2.79 3
Telecom Services 2 3 32 1.93 1.98 2Health Care 11 12 9 2.91 2.96 2
Financials 4 12 251 2.42 2.38 (1)Industrials 7 7 6 2.88 2.67 (7)
S&P 500 $57 $76 32 % $22.41 $22.94 2 %
2 %
3 %
4 %
5 %
6 %
7 %
8 %
2010E
2011E
2012E
2013E
2014E
2015E
2016E
2017E
2018E
2019E
2024E
S&P500DPS
growth(yearoveryear)
Swap MarketCurrent
Goldman SachsTop-DownDividendCurrent
Dividend Growth Expectations
Swap Market12-Feb-2010
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March 26, 2010 United States: Portfolio Strategy
Goldman Sachs Global Economics, Commodities and Strategy Research 4
S&P 500 Performance
Exhibit 5: S&P 500 sector performance over the last weekas of March 25, 2010
Exhibit 6: S&P 500 price return and daily trading volume LTMas of March 25, 2010
Source: FactSet, and Goldman Sachs Global ECS Research. Source: FactSet, and Goldman Sachs Global ECS Research.
Exhibit 7: S&P 500 sector performance over time
as of March 25, 2010
Exhibit 8: BEST and WORST performing S&P 500 STOCKS BY SECTOR
as of March 25, 2010
Source: FactSet, and Goldman Sachs Global ECS Research. Source: FactSet, and Goldman Sachs Global ECS Research.
(3.0)
(2.1)(0.7)
(0.4)
0.0
0.2
0.3
0.6
1.21.2
0.0
(4.0) (3.0) (2.0) (1.0) 0.0 1.0 2.0
Energy
UtilitiesMaterials
Health Care
S&P 500
Telecom Services
Industrials
Consumer Staples
Information Tech
Cons DiscretionaryFinancials
1-week Total Return (%)
01
2
3
4
5
6
7
8
9
600700
800
900
1,000
1,100
1,200
1,300
1,400
1,500
25-Mar-08
25-May-08
25-Jul-08
25-Sep-08
25-Nov-08
25-Jan-09
25-Mar-09
25-May-09
25-Jul-09
25-Sep-09
25-Nov-09
25-Jan-10
25-Mar-10
Sharestraded(billions)S
&P500PriceLevel
S&P 500 daily trading volume (rhs)
S&P 500 daily price level (lhs)
Total Return Percentage Change (%)
1-Week 1-Month 3-Month 6-Month YTD 12-Month
Industrials 0 % 8 % 11 % 19 % 12 % 70 %
Financials 1 10 10 10 11 73
Cons Discretionary 1 8 9 23 11 69
Consumer Staples 0 3 5 12 6 32
Health Care (0) 3 2 14 3 35
Information Tech 1 7 2 14 2 59
Materials (1) 6 0 11 1 51
Energy (3) 1 (3) 4 (2) 20
Telecom Services 0 6 (5) 3 (4) 9
Utilities (2) 1 (6) 3 (5) 19
S&P 500 0 % 6 % 4 % 13 % 5 % 46 %
BEST STOCKS WORST STOCKS
Return (%) Return (%)
Sector Ticker 1-week YTD Ticker 1-week YTD
Cons Discr LEN 9 % 42 % DTV (4)% 0 %
Consumer Staples WAG 4 (1) KR (4) 4
Energy PXD 1 11 CNX (9) (14)
Financials HST 6 25 MS (4) (2)
Health Care AET 5 10 GENZ (11) 4Industrials CAT 4 10 MMM (3) (1)
Info Tech NVLS 8 8 JBL (7) (5)
Materials TIE 12 27 NEM (6) 2
Telecom Services Q 5 27 AMT (4) (2)
Utilities SCG (0) 1 NRG (8) (14)
S&P 500 TIE 12 % 27 % GENZ (11)% 4 %
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March 26, 2010 United States: Portfolio Strategy
Goldman Sachs Global Economics, Commodities and Strategy Research 5
S&P 500 Performance (contd)
Exhibit 9: TOP 10 performing SUB-SECTORS over the last weekas of March 25, 2010
Exhibit 10: BOTTOM 10 performing SUB-SECTORS over the last weekas of March 25, 2010
Source: FactSet, and Goldman Sachs Global ECS Research. Source: FactSet, and Goldman Sachs Global ECS Research.
Exhibit 11: TOP 10 performing S&P 500 STOCKS over the last weekas of March 25, 2010 Exhibit 12: BOTTOM 10 performing S&P 500 STOCKS over the last weekas of March 25, 2010
Source: FactSet, and Goldman Sachs Global ECS Research. Source: FactSet, and Goldman Sachs Global ECS Research.
3
34
4
4
4
4
4
45
0 1 2 3 4 5 6
Homebuilding
Auto Parts & EquipmentCommercial Printing
Casinos & Gaming
Other Diversified Financial Services
Computer & Electron ics Retail
Drug Retail
Hotels Resorts & Cruise Lines
Semiconductor EquipmentConsumer Electronics
1-week Total Return (%)
(7)
(7)
(6)
(5)
(5)
(4)
(4)
(4)
(4)(4)
(8) (7) (6) (5) (4) (3) (2) (1) 0
Coal & Con sumable Fuels
Oil & Gas Equipment & Services
Gold
Oil & Gas Drilling
IPP & Energy Traders
Electroni c Manufacturing Services
Paper Products
Oil & Gas Exploration & Prod uction
Real Estate ServicesOil & Gas Refining & Marketing
1-week Total Return (%)
Return (%)
Company Name Ticker Sector 1-week YTD
Titanium Metals TIE Materials 12 27
Lennar Corp LEN Cons Discr 9 42
Novellus Systems NVLS Info Tech 8 8
Cliffs Natural CLF Materials 7 50
Viacom Inc. VIA.B Cons Discr 6 12
Host Hotels & Resorts Inc. HST Financials 6 25
Citigroup Inc. C Financials 6 29
Starwood Hotels & Resorts HOT Cons Discr 6 23
KLA-Tencor Corp. KLAC Info Tech 6 (14)
Wyndham Worldwide WYN Cons Discr 6 27
S&P 500 Average (0) 7
Return (%)
Company Name Ticker Sector 1-week YTD
Genzyme Corp. GENZ Health Care (11) 4
Consol Energy Inc. CNX Energy (9) (14)
Baker Hughes BHI Energy (9) 11
Nabors Industries Ltd. NBR Energy (9) (14)
BJ Services BJS Energy (8) 11
NRG Energy NRG Utilities (8) (14)
Jabil Circuit JBL Info Tech (7) (5)
Range Resources Corp RRC Energy (7) (8)
Smith International Inc. SII Energy (7) 51
AES Corp. AES Utilities (7) (19)
S&P 500 Average (0) 7
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March 26, 2010 United States: Portfolio Strategy
Goldman Sachs Global Economics, Commodities and Strategy Research 6
Earnings and Sales
Exhibit 13: EARNINGS GROWTH: S&P 500 bottom-up consensus estimatesas of March 25, 2010
Exhibit 14: SALES GROWTH: S&P 500 bottom-up consensus estimatesas of March 25, 2010
Source: FactSet, and Goldman Sachs Global ECS Research. Source: FactSet, and Goldman Sachs Global ECS Research.
Exhibit 15: TOP-DOWN vs. BOTTOM-UP: Goldman Sachs vs. Consensusas of March 25, 2010
Exhibit 16: REVISIONS: S&P 500 consensus EPS revisionsas of March 25, 2010
Source: FactSet, and Goldman Sachs Global ECS Research. Source: FactSet, and Goldman Sachs Global ECS Research.
2010E Earnings Growth Annual
1QE 2QE 3QE 4QE 2010E 2011E
Financials 561 257 181 173 238 47
Energy 1530 73 44 46 88 28
Materials 167 111 28 32 68 30
Consumer Discretionary 787 36 15 6 44 18
Information Technology 80 55 35 10 39 13
S&P 500 70 38 30 26 38 20
Utilities 8 10 6 24 10 5
Consumer Staples 7 4 4 4 6 9
Health Care (4) 4 4 17 5 10
Industrials (5) (3) 22 4 4 19
Telecom Services (11) (6) 3 12 (1) 9
S&P 500 (ex-Financials) 52 24 18 15 25 15
2010E Sales Growth Annual
1QE 2QE 3QE 4QE 2010E 2011E
Energy 48 38 30 24 34 14
Materials 25 24 15 8 18 8
Information Technology 13 14 11 7 11 8
S&P 500 11 11 11 7 10 7
Health Care 5 6 9 5 6 4
Consumer Staples 5 5 6 5 5 5
Consumer Discretionary 8 6 6 2 5 6
Industrials (3) 1 6 4 2 5
Telecom Services 1 2 0 1 1 1
Contribution to EPS Annual earnings growth ratesGS Top-Down EPS Bottom-up GS Top-Down Bottom-Up
2010E 2011E 2010E 2011E 2010E 2011E 2010E 2011E
Energy $10 $15 $10 $13 93 % 45 % 88 % 28 %
Materials 2 3 2 3 69 15 68 30
Telecom Services 3 3 2 2 32 1 (1) 9
Consumer Discretionary 5 5 7 8 5 5 44 18
Utilities 3 4 3 4 15 1 10 5
Information Technology 11 12 14 16 7 10 39 13
Industrials 7 8 7 8 6 16 4 19Health Care 12 13 12 13 9 4 5 10
Consumer Staples 9 9 9 10 4 3 6 9
S&P 500 ex-Financials 63 71 67 77 18 13 25 15
Financials Operating EPS 12 19 12 17 251 54 238 47
S&P 500 Operating EPS $76 $90 $79 $95 32 % 20 % 38 % 20 %
+ Provisions & Writedowns 5 1 NA NA (63) (82) NA NA
S&P 500 EPS ex-P&W 81 91 NA NA 13 13 NA NA
75
76
77
78
79
80
31-Dec
31-Jan
28-Feb
31-Mar
30-Apr
ConsensusBottom-Up
$79
GoldmanSachs
$76
S&P 500 2010E EPS
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March 26, 2010 United States: Portfolio Strategy
Goldman Sachs Global Economics, Commodities and Strategy Research 7
Revisions
Exhibit 17: EARNINGS and SALES REVISIONSAggregate dollars % change, as of March 25, 2010
Exhibit 18: Stocks with the most POSITIVE and NEGATIVE EPS REVISIONSas of March 25, 2010
Source: FirstCall, I/B/E/S, FactSet, and Goldman Sachs Global ECS Research. Source: FirstCall, I/B/E/S, FactSet, and Goldman Sachs Global ECS Research.
Exhibit 19: S&P 500 1-Month Earnings Revisions Sentiment
as of March 25, 2010
Exhibit 20: 1-Month Earnings Revision Sentiment by SECTOR
as of March 25, 2010
Source: FirstCall, I/B/E/S, FactSet, and Goldman Sachs Global ECS Research. Source: FirstCall, I/B/E/S, FactSet, and Goldman Sachs Global ECS Research.
EPS REVISIONS SALES REVISIONS1 month 3 month 1 month 3 month
10E 11E 10E 11E 10E 11E 10E 11E
Materials 0.8% (0.3)% 4.9 % 4.2 % 0.4 % 0.5 % 4.1 % 3.2 %
Consumer Discretionary 0.6 0.3 6.9 4.3 0.2 0.5 1.8 1.4
Information Technology 0.4 0.5 8.4 7.2 0.5 0.6 5.5 6.0
Industrials 0.2 0.6 2.7 3.1 0.2 0.1 1.0 1.5
Health Care (0.0) 0.1 (0.4) (0.2) 0.1 (0.1) 1.0 0.9
Consumer Staples (0.0) 0.1 0.1 (0.2) 0.0 (0.2) 0.8 1.1
S&P 500 (0.1) 0.1 2.1 1.3 0.2 0.3 1.7 0.2Energy (0.4) (0.1) 1.3 (0.8) 0.5 0.7 1.2 (6.1)
Utilities (0.5) (0.6) (1.5) (2.2) NM NM NM NM
Telecommunication Services (0.9) (0.6) (5.0) (5.9) 0.0 0.1 0.1 (0.0)
Financials (0.9) 0.0 (1.3) (1.3) NM NM NM NM
POSITIVE EPS REVISIONS NEGATIVE EPS REVISIONS1 month 3 month 1 month 3 month
Ticker Revis. Return Revis. Return Ticker Revis. Return Revis. Return
X 613 % 17 % (63)% 10 % TSO (47)% 14 % (89)% 2 %
TIE 51 36 24 24 MWW (40) 20 NM (3)
DHI 29 5 NM 17 GT (37) 4 (60) (10)
LEN 23 11 55 35 AIG (31) 25 (13) 15
ODP 18 16 63 14 DFS (26) 14 (28) 3
MU 18 14 41 2 PHM (19) 9 13 14
AMD 17 14 64 (9) FHN (19) 10 NM 3
CMA 17 7 54 27 SUN (17) 10 (36) 12
WY 14 7 23 0 HIG (17) 14 (11) 18
SNDK 12 23 92 16 STT (14) 2 (13) 2
S&P 500 (0)% 6 % 2 % 4 % (0)% 6 % 2 % 4 %
(30)%
(20)%
(10)%
0 %
10 %
20 %
30 %
(60)%
(40)%
(20)%
0%
20%
40%
60%
Dec-05
Jun-06
Dec-06
Jun-07
Dec-07
Jun-08
Dec-08
Jun-09
Dec-09
Jun-10
S&P500Mo
nthly%Return
1-MonthRe
visionSentiment
1-Month 2010 EPS Revision Sentiment (lhs)[(# pos. revisions - # neg. revisions)/ total revisions]
Price Performance (rhs)
S&P 500
(15)%
(10)%
(5)%
0 %
5 %
10 %
15 %
20 %
25 %
ConsumerDiscr
Industrials
InfoTech
S&P500
HealthCare
Materials
ConsumerStaples
Energy
Financials
Utilities
TelecomServices
Earnin
gsSentiment
1-Month Earnings Revision Sentiment by Sector[(# pos. revisions - # neg. revisions)/ total revisions]
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March 26, 2010 United States: Portfolio Strategy
Goldman Sachs Global Economics, Commodities and Strategy Research 10
Style and Size
Exhibit 26: Total return by style and size over timeas of March 25, 2010
Exhibit 27: Total return by SECTOR for S&P 500 vs. Russell 2000as of March 25, 2010
Source: FactSet, and Goldman Sachs Global ECS Research. Source: FactSet, and Goldman Sachs Global ECS Research.
Exhibit 28: GROWTH vs. VALUE relative performance over timeRussell 1000 Growth vs. Value, as of March 25, 2010
Exhibit 29: LARGE CAP vs. SMALL CAP relative performance over timeS&P 500 vs. Russell, as of March 25, 2010
Source: FactSet, and Goldman Sachs Global ECS Research. Source: FactSet, and Goldman Sachs Global ECS Research.
Total Return Percentage Change (%)1-Week 1-Month 3-Month 6-Month YTD
Large Cap vs. Small Cap
S&P 500 0 6 4 13 5
Russell 2000 (0) 8 7 14 9
Large vs. Small (bps) 36 (201) (344) (139) (385)
Growth vs. Value
Russell 1000 Growth (0) 5 3 14 4
Russell 1000 Value (0) 6 5 12 6
Growth vs. Value (bps) 5 (86) (166) 192 (204)
Weight (%) 1-Week (% Return) YTD (% Return)Sector SP500 R2000 SP500 R2000 (bps) SP500 R2000 (bps)
Energy 11 5 (3) (5) 177 (2) 1 (280)
Information Tech 19 18 1 (1) 173 2 7 (451)
Financials 17 21 1 0 92 11 12 (45)
Materials 3 5 (1) (2) 88 1 5 (335)
Telecom Services 3 1 0 (1) 76 (4) (3) (121)
Industrials 10 15 0 (0) 53 12 6 645
Cons Discretionary 10 14 1 1 44 11 18 (745)
Consumer Staples 11 3 0 0 (12) 6 8 (238)
Utilities 3 3 (2) (1) (79) (5) 2 (622)
Health Care 12 14 (0) 1 (92) 3 9 (540)
Index 100 100 0 (0) 36 5 9 (385)
85
90
95
100
105
110
Jan-0
8
Mar-
08
May-0
8
Ju
l-08
Sep-0
8
Nov-0
8
Jan-0
9
Mar-
09
May-0
9
Ju
l-09
Sep-0
9
Nov-0
9
Jan-1
0
Mar-
10
May-1
0
Value outperforming
Growth outperforming85
87
89
91
93
95
97
99
101
103
105
Jan-0
8
Mar-
08
May-0
8
Ju
l-08
Sep-0
8
Nov-0
8
Jan-0
9
Mar-
09
May-0
9
Ju
l-09
Sep-0
9
Nov-0
9
Jan-1
0
Mar-
10
May-1
0
S&P 500 outperforming
Russell 2000 outperforming
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March 26, 2010 United States: Portfolio Strategy
Goldman Sachs Global Economics, Commodities and Strategy Research 11
Global Equity Market and Mutual Fund Performance
Exhibit 30: GLOBAL EQUITY MARKET performance over the past weekas of March 25, 2010
Exhibit 31: US EQUITY MUTUAL FUND performance vs. benchmarkas of March 25, 2010
Source: FactSet and Goldman Sachs Global ECS Research. Source: Lipper, Factset, and Goldman Sachs Global ECS Research.
Exhibit 32: GLOBAL EQUITY MARKET performance over timeas of March 25, 2010
Exhibit 33: International and other MUTUAL FUND performanceas of March 25, 2010
Source: FactSet, and Goldman Sachs Global ECS Research. Source: Lipper, FactSet, and Goldman Sachs Global ECS Research.
(3)
(2)
(2)(2)
(1)
(1)
(0)
(0)
0
0
0
(0)
(3) (2) (1) 0 1
Brazil (Bovespa)
Chin a (MSCI China)
Spain (IBEX 35)
Japan (Nikkei)
UK (FTSE 100)
Europe (DJ Stoxx 600)
Australia (ASX 200)
France (CAC 40)
U.S. (S&P 500)
Korea (KOSPI)
Germany (Dax)
Mexico (Bolsa)
% Weekly price change
Avg. Total Return (%) Stdev No. of AUM
Lipper Indices 1-week YTD 1-Week YTD Funds $ bil
Large-Cap Core Funds (0.1) 4.4 0.3 1.3 30 252
Benchmark: S&P 500 0.0 5.0
Out / (Underperformance) (bps) (11) (63)
Large-Cap Growth Funds (0.2) 3.9 0.2 1.2 30 248
Benchmark: Russell 1000 Growth (0.0) 4.3
Out / (Underperformance) (bps) (15) (36)
Large-Cap Value Funds (0.1) 5.2 0.3 1.3 30 224Benchmark: Russell 1000 Value (0.1) 6.3
Out / (Underperformance) (bps) (6) (119)
Small-Cap Core Funds (0.6) 7.4 0.5 2.4 29 NA
Benchmark: Russell 2000 (0.4) 8.9
Out / (Underperformance) (bps) (20) (152)
Price Return (%) USD
1-Week 1-Month 3-Month 2010 YTD 2009
Mexico (Bolsa) 0 8 5 8 52
U.S. (S&P 500) (0) 6 3 5 23
Japan (Nikkei) (2) 3 2 3 16
Korea (KOSPI) 0 8 3 2 62
Australia (ASX 200) (0) 10 5 2 69UK (FTSE 100) (1) 6 (1) (2) 37
Europe (DJ Stoxx 600) (1) 7 (2) (3) 32
Brazil (Bovespa) (3) 5 (1) (4) 144
China (MSCI China) (2) 4 (2) (4) 63
Germany (Dax) 0 9 (4) (4) 28
France (CAC 40) (0) 8 (5) (5) 26
Spain (IBEX 35) (2) 8 (14) (14) 34
Average (1) 7 (1) (1) 49
Avg. Total Return (%) Stdev No. of AUM
Lipper Indices 1-week YTD 1-week YTD Funds $ bil
International Equity
Global Funds (1) 2 0.5 2.0 30 181
International Funds (1) 0 0.4 2.3 30 378
European Funds (1) (1) 0.6 2.9 10 18
Emerging Market Funds (1) 1 0.5 1.4 29 NA
Real Estate and Natural Resources
Real Estate 1 11 0.3 1.3 30 37
Natural Resource (4) (3) 0.7 1.2 9 NA
Fixed Income
General U.S. Government Funds Index (1) 1 0.8 0.5 30 NA
A Rated Bond Funds Index (1) 2 0.4 0.8 29 NA
BBB Rated Funds Index (1) 2 0.8 1.4 30 NA
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March 26, 2010 United States: Portfolio Strategy
Goldman Sachs Global Economics, Commodities and Strategy Research 14
Risk and Dispersion
Exhibit 39: Goldman Sachs Risk BarometerIndex is number of standard deviations from the average * 100
Exhibit 40: VIX Volatility Indexas of March 25, 2010
Note: Metrics included are implied option volatility (S&P 500 and NASDAQ 100), normalized skew, highyield credit spreads, credit derivative swap spreads, mutual fund net flows, and cash levels.
Source: Goldman Sachs Global ECS Research. Source: Goldman Sachs Global ECS Research.
Exhibit 41: S&P 500 stock and sector average correlationas of March 25, 2010
Exhibit 42: Credit Default Swaps, 5-Year On-the-run Spreadsas of March 25, 2010
Source: Goldman Sachs Global ECS Research. Source: Goldman Sachs Global ECS Research.
(300)
(200)
(100)
0
100
200
300
400
Dec-94
Nov-95
Nov-96
Nov-97
Nov-98
Nov-99
Nov-00
Nov-01
Nov-02
Nov-03
Nov-04
Nov-05
Nov-06
Nov-07
Nov-08
Nov-09
Nov-10
Risk Aversion
Increasing
Risk AversionDecreasing
25-Mar-10
0
15
30
45
60
75
90
Jan-90
Jan-92
Jan-94
Jan-96
Jan-98
Jan-00
Jan-02
Jan-04
Jan-06
Jan-08
Jan-10
Jan-12
81All time hig h on 20-Nov-08
18
25-Mar-10
0.73
0.38
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1.0
Dec-89
Dec-90
Dec-91
Dec-92
Dec-93
Dec-94
Dec-95
Dec-96
Dec-97
Dec-98
Dec-99
Dec-00
Dec-01
Dec-02
Dec-03
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-10
AverageCorrelation
Average stock correlation
Average sector correlation
(200)
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
0
50
100
150
200
250
300
Oc
t-07
Dec-0
7
Fe
b-0
8
Apr-
08
Jun-0
8
Aug-0
8
Oc
t-08
Dec-0
8
Fe
b-0
9
Apr-
09
Jun-0
9
Aug-0
9
Oc
t-09
Dec-0
9
Fe
b-1
0
Apr-
10
HighYieldCDX(bps)
InvestmentGra
deCDX(bps)
CDX (IG) (lhs)
CDX (HY) (rhs)
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March 26, 2010 United States: Portfolio Strategy
Goldman Sachs Global Economics, Commodities and Strategy Research 15
Goldman Sachs Recommendations and Forecasts
Exhibit 43: Goldman Sachs Recommended Sector Weightings (a)as of March 25, 2010
Exhibit 44: Goldman Sachs US Economics quarterly GDP forecastsas of March 25, 2010
(a) Sector weightings last rebalanced December 7, 2009.
Source: Goldman Sachs Global ECS Research. Source: Goldman Sachs Global ECS Research.
Exhibit 45: Goldman Sachs COMMODITY and CURRENCY forecastsas of March 25, 2010 Exhibit 46: Goldman Sachs US Economics forecastsas of March 25, 2010
Source: Goldman Sachs Global ECS Research. Source: Goldman Sachs Global ECS Research.
Sector WeightingsTotal Goldman Sachs Current GS GS
Return Recommended S&P 500 Overweight / Alpha
Sectors YTD Sector Weightings Weight Underweight YTD
Information Technology 2 % 19 % 300 bp (8)bp
Energy (2) 11 300 (19)
Materials 1 3 200 (7)
Consumer Staples 6 11 0 0
Industrials 12 10 0 0
Financials 11 17 0 0
Telecom Services (4) 3 (100) 9
Consumer Discretionary 11 10 (200) (11)
Utilities (5) 3 (200) 18
Health Care 3 12 (300) 5
S&P 500 5 % 100 % 0 bp (13)bp
Overweight
Neutral
Underweight
2.52.0
1.5 1.5
2.53.0
3.5 3.5
0.0 %
0.5 %
1.0 %
1.5 %
2.0 %
2.5 %
3.0 %
3.5 %
4.0 %
Q1E Q2E Q3E Q4E Q1E Q2E Q3E Q4EUSGDP
Growth(qoqannualized
%)
2010 2011
Forecasts
units Current 3m 6m 12m
Energy
WTI Crude Oil $/bbl 80.53 92.00 97.00 96.50
NYMEX Nat. Gas $/mmBtu 3.98 5.50 5.50 6.00
RBOB Gasoline $/gal 2.20 2.44 2.50 2.39
Metals
LME Copper $/mt 7435 7850 8045 7825
London Gold $/troy oz 1093 1260 1315 1390
London Silver $/troy oz 16.79 21.00 21.90 23.20
Currencies
Euro / US Dollar EUR/$ 1.33 1.45 1.45 1.35
US Dollar / Yen $/ 92.7 92.0 94.0 98.0
Sterling / US Dollar /$ 1.49 1.67 1.73 1.61
% Annual Change2009E 2010E 2011E
Real GDP (2.4)% 2.6% 2.4%
Consumer Spending (0.6) 1.9 1.4
Total Fixed Investment (18.3) (2.4) 4.2
Business Fixed Investment (17.7) (3.2) 2.3
Residential Investment (20.4) 0.7 10.9
Federal Government Spending 5.2 3.9 4.0Exports of Goods and Services (9.6) 12.1 7.5
Imports of Goods and Services (13.9) 7.8 2.5
Core CPI 1.7 0.8 0.1
Unemployment Rate 9.3 9.8 10.1
Fed Funds Rate 0.1 0.2 0.2
2-year Treasury Rate 0.9 0.9 2.0
10-year Treasury Rate 3.8 3.3 4.0
8/9/2019 Charts March 27
16/20
8/9/2019 Charts March 27
17/20
March 26 2010 United States: Portfolio Strategy
8/9/2019 Charts March 27
18/20
March 26, 2010 United States: Portfolio Strategy
Goldman Sachs Global Economics, Commodities and Strategy Research 18
Recent US Portfolio Strategy
Please contact your Goldman Sachs salesperson for access to additional research or if you wish to be added to the US Portfolio
Strategy research distribution list.
Exhibit 51: Recent research from US Portfolio Strategy
Source: Goldman Sachs Global ECS Research.
Latest Market Research Publication Date
US Sector View s: Global vs. Domestic tug-of-w ar w ithin the US equity market March 25, 2010
US Portfolio Strategy: Using Sharpe Ratios to enhance fund returns March 19, 2010
US Thematic View s: GARP Update February 28, 2010
US Equity View s: 4Q Earnings preview : Earnings rise, sales trough, margins expand January 19, 2010
US Portfolio Strategy 2010 Outlook: Cyclical start; defensive finish December 7, 2009
Franchise Research Publication Date
Global Dividend Sw ap Monitor: Updating our bottom-up dividend forecasts follow ing the results season March 5, 2010
Global Portfolio Strategy: Macro Conference - Asia 2010: Takeaw ays February 12, 2010
Global Portfolio Strategy: The New BRICS Nifty 50 - EM and DM Baskets November 4, 2009
Periodical Research Description Frequency Timing / Recent Release
Hedge Fund Trend Monitor Analysis of hedge fund holdings and positioning Quarterly February 22, 2010
S&P 500 Beige Book Qualitative assessment of S&P 500 quarterly earnings reports Quarterly February 5, 2010
Strategy Baskets Overview of US Portfolio Strategy thematic baskets Quarterly August 19, 2009
US Monthly Chartbook Monthly report on where to invest in the S&P 500 Monthly March 2, 2010
US Weekly Kickstart Five minute guide to the US equity market Weekly Friday PM
Where to Invest Now Marketing presentation highlighting recent research and best trade ideas Monthly March 5, 2010
8/9/2019 Charts March 27
19/20
8/9/2019 Charts March 27
20/20
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