Goldman sees the economy surprising in 2020 and these stocks benefiting most from the rebound

By: Yun Li

  • Cyclical stocks, those typically tied to economic growth, have led the record-setting rally in the past three months.
  • The bank predicts the leadership of cyclicals will persist on the back of a rebound in the U.S. economy.
  • Goldman screened Russell 1000 stocks for names with high economic sensitivity but still-depressed valuations.
  • The stocks include CBS, Snap-On, Kohl’s, Urban Outfitters and TCF Financial.

Goldman Sachs believes the U.S. economy is poised to snap back and certain stocks could have the most upside from the economic recovery.

Cyclical stocks, those typically tied to economic growth, have led the record-setting rally in the past three months. While the S&P 500 surged about 8% during the period, cyclical stocks have outperformed their defensive counterparts, with a return of about 12%, Goldman said. The bank predicts that trend will persist on the back of a rebound in the U.S. economy.

“The equity market is anticipating an acceleration in US economic growth during the coming months,” David Kostin, Goldman’s chief U.S. equity strategist, said in a note Friday. “Investors who want to capture further cyclical upside can improve risk-reward by narrowing their focus to select cyclical stocks.”

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