Alexandra Wilson Elizondo from Goldman Sachs Asset Management stated that new data showing the resilience of the US labor market has suppressed five consecutive weeks of gains in the US stock market, while further declines indicate buying opportunities.

The unexpectedly strong recruitment data in November has triggered a repricing of the Federal Reserve's interest rate trend, and swap contracts currently show that investors believe the possibility of a rate cut in March next year is unlikely. As the market adjusts to the possibility of the Federal Reserve maintaining higher interest rates for a longer period of time, the $4 trillion rise in US stocks since October may be unsustainable, and there is a possibility of weakness in the future.

Wilson Elizondo, Vice Chief Investment Officer of Goldman Sachs Multi Asset Solutions, suggests that any pullback under this premise will be seen as "false action", and if the US stock market falls first, it will quickly reverse later. She said in a phone interview, "If the market falls, it's a good opportunity to rebalance or buy. It's too early to underestimate the risk premium of stocks now."

Goldman Sachs economists predict that the Federal Reserve will begin cutting interest rates in the second half of 2024 and predict that inflation rates will decrease while economic growth continues, which should provide support for the market, especially for large cap stocks. Wilson Elizondo said, "We do believe in quality factors, and large cap stocks often perform well in such environments. Although valuations seem tight, we do believe there is still room for improvement."

She said that although small cap stocks have performed well recently, Goldman Sachs does not pursue the returns of small cap stocks because they often perform poorly in the later stages of the interest rate cycle.

The company also maintains a cautious and constructive attitude towards interest rates at the beginning of 2024, and expects investors to redeploy funds to the long end of the curve. Wilson Elizondo said, "We believe that a portion of the $8 trillion in money market funds will ultimately build confidence in future cash flows by shifting towards the curve belly."