“Our projections suggest that both 2010 and 2011 will be rather strong years,” a team led by Jim O’Neill, Goldman Sachs’s chief economist in London, wrote today in a report in which the bank made eight “top trade” recommendations. “The combination of better-than-expected growth and lower-than- expected inflation should be good news for financial markets.”
Among its new currency recommendations, Goldman Sachs said investors should buy the pound against the New Zealand dollar and the Polish zloty versus the yen. The bank also backed Russian equities and suggested investors should go “long” credit protection on Spain and “short” protection on Ireland.
New York-based Goldman Sachs, the most profitable securities firm in Wall Street history, said earlier today it was ending the last four of its top trades for 2009 after “potential gains” for nine of the 11 bets, including one that the pound would strengthen against the dollar. Goldman Sachs said it had “significant losses” on a recommendation to buy the dollar against the yen, losing 9 percent.
The MSCI World Index of stocks climbed 28 percent this year as the global economic slump eased. Crude oil jumped 75 percent, gold advanced to a record $1,217.23 an ounce and the dollar slid against higher-yielding currencies such as the Australian dollar and Norwegian krone. Treasuries dropped 1.4 percent in 2009, according to Merrill Lynch & Co. indexes, after a resurgence in risk appetite.
