Economics
Credit Markets Scream Recession, But Goldman Says Not to Worry
Where in the World Can Investors Find Value?
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The credit market is pricing in an overly dour assessment of the U.S. economy, according to Goldman Sachs Group Inc., a mistake that could prove profitable for buyers.
Rising risk premiums for U.S. corporate debt are sending a "false recession signal," Goldman Sachs credit strategist Lotfi Karoui wrote in a note to clients Tuesday. While risk premiums for both investment-grade and high-yield debt are at levels that preceded recessions in 1990 and 2001, the outlook for global growth in 2016 should underpin the market, he said.