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Goldman Sachs prefers stocks for high risk appetite

Cyclical stocks could provide an attractive upside if macro surprises remain positive, while there are signs that conditions for reflation may persist and support risky assets in the near future, strategists at Goldman Sachs say.

The prices of European risky assets have a sufficient risk premium, and they have the potential for good dynamics, if the restart of the European economy is a pleasant surprise, Alessio Rizzi and other strategists wrote in their review.

European equities should continue to rally, while bank and domestic stocks are likely to outperform most in a strengthening euro / rate hike scenario.

The strategists confirmed their position above the market for shares and below the market for bonds on the horizon of three and 12 months.

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