Goldman Sachs is taking profits from Tech MegaCaps and redirecting capital to…

Goldman Prime Brokerage says it is skimming of some of its profits in TechMegaCap stock. According to the bankers, the tech sector may have difficulty continuing its BullRun in light of expectations to keep rates higher for longer. The trend remains Long, with the development and integration of artificial intelligence continuing to provide support, but GS is currently taking partial profits from the sector, and will shift capital to the energy sector, as well as some markets outside the US /such as Japan/

Stock returns from the Magnificent 7 no longer shine so brightly. While Nvidia Corp. recorded a 72% gain this year, others have not performed as well. Apple Inc. shares are struggling due to weak demand for iPhones in China, and Tesla Inc. is down 30% year-to-date due to deteriorating demand for electric vehicles and stiff competition from Chinese EV makers.

Goldman Sachs Asset Management, holds a preponderance of energy stocks as a hedge against inflation and geopolitical risks.
“This is a good trade as S&P 500 oil and gas companies are up 16%, compared with an 11% rise in technology stocks,” the investment bank says.

However, they are still cautious on utilities and real estate funds, as well as small-cap companies due to their sensitivity to high interest rates.

Also, the bank expects a potential correction in the broad US market as over 80% of the companies in the SP500 are currently above 200MA /their long-term average balance sheet point/

Japan is one of the markets to which Goldman Sachs will continue to allocate capital. Good corporate reforms in the country, improving business sentiment and relatively low company metrics are attracting the eyes of institutional investors looking for profits outside the US.