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Goldman Sachs Releases Recession Manual

Goldman Sachs economists believe the chances of the economy entering a recession in the next two years are still low, even as the investment bank’s equity team has just released a recession manual for its clients on how to prepare for a downturn.“A recession is not inevitable, but clients constantly ask what to expect from equities in the event of a recession,” chief U.S. equity strategist David Kostin wrote in a note to clients on May 19. “Our economists estimate a 35% probability that the U.S. economy will enter a recession during the next two years and believe the yield curve is pricing a similar likelihood of a contraction.”
Kostin pointed out that the latest rotations in the U.S. equity market suggest that traders are pricing growing odds of a recession that doesn’t mirror “the strength of recent economic data.” The research note cited that the divi …

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