A monitor displays Goldman Sachs Group Inc. signage on the floor of the New York Stock Exchange (NYSE) in New York, U.S. (Photographer: Michael Nagle/Bloomberg)

Here's What Goldman Conference Attendees Think Markets Will Do

(Bloomberg) -- Equities were chosen to be the best global asset class this year, followed by emerging-market credit and cash, according to a survey of attendees at a Goldman Sachs Group Inc. conference last week in Hong Kong.

Stocks were the top pick by 33 percent of respondents, while 25 percent said the best performer would be emerging-market credit, Goldman said in a report on Jan. 25. Cash was picked by 14 percent, developed-market government bonds by 13 percent, commodities by 10 percent and developed-market corporate bonds by 5 percent of people.

“Investors think China/U.S. trade tensions may ease, if not remain unchanged in current position,” Goldman strategists including Timothy Moe wrote in the report, citing the survey results. “Politics and trade friction are considered to be the biggest risks to equities, followed by economic recession.”

The survey comes after a year in which uncertainty about everything from the Federal Reserve’s rate trajectory to global trade policy to economic growth and corporate earnings has risen. The MSCI All-Country World Index fell 11 percent in 2018, its worst performance since 2008, and other asset classes struggled mightily as well.

Global equity returns as measured by the MSCI ACWI were seen by half of respondents in the 5 percent to 10 percent range this year. About 12 percent expected better performance than that, while 38 percent foresee the gauge ending 2019 flat or down. With the gauge already up 6.3 percent less than a month into 2019, that would indicate a relatively flat performance for the rest of the year.

Here's What Goldman Conference Attendees Think Markets Will Do

In terms of regions, 53 percent believe Asia ex-Japan will perform the best, with the U.S. ranked best by 21 percent. By industry group, technology led the pack with 32 percent, while consumer stocks got 21 percent of votes and financials 19 percent.

The survey found some division with a question on which central bank will surprise the most. The Federal Reserve garnered more than half the votes, with 30 percent saying it would be more dovish than expected, and 22 percent saying it would be more hawkish. The People’s Bank of China being surprisingly dovish was picked by 18 percent, while 16 percent said it would be the European Central Bank being more dovish than thought.

That’s on top of a split in how many times respondents think the Fed will hike this year. Around 41 percent said it would be once, 29 percent said twice and 20 percent said the central bank would remain on hold this year.

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