Goldman Sachs strategists said that the narrowing of market breadth is increasing the risk of momentum reversal, and U.S. consumer stocks, which have been neglected by the market before, may now present an opportunity.
A team led by Ben Snyder claims that once the momentum stock market trend reverses, the stocks that led the gains earlier on may fall back, while sectors that have been stagnant are expected to catch up in gains.
The team has identified defensive stocks such as Tyson Foods and Kroger for investors who are concerned about the ongoing deterioration of growth prospects and a potential market correction.
The team stated that compared to other companies within the sector, these individual stocks have lower actual stock price volatility and higher yields on free cash flow.
The team warns that the market breadth has narrowed significantly, and the risk of holding momentum assets continues to rise. The current market concentration is still close to the high levels seen during the internet bubble period.
Strategists predict that earnings per share of S&P 500 components will grow by 29% in 2026 and 18% in 2027.
"In addition to the pressures brought by interest rates and oil prices, the growth rate of AI investments has slowed down, and this supporting factor will gradually weaken."
The text also includes promotional information for an event, stating that from October 20th to 22nd, the 2026 Sustainable Global Leaders Conference will be held along the Huangpu River in Shanghai, along with registration guidelines.
