Goldman Strategist’s 2024 Call to Look Beyond US Stocks Is Still Paying Off

Peter Oppenheimer, chief global equity strategist at Goldman Sachs, photographed at the company's headquarters in London on July 21st 2025. Photo by Carlotta Cardana /Bloomberg

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(Bloomberg) — Investors are pricing the US stock market as if there’s no longer any risk of a tariff-driven recession. Peter Oppenheimer isn’t so sure. 

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The chief global equity strategist at Goldman Sachs Group Inc. says it’s possible that tariffs bite hard enough to hurt equity prices even as Washington agrees on deals with key trading partners. And while the US might dodge a recession, valuations are high enough that it’s prudent to keep diversifying into other markets.

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Oppenheimer made a gutsy, prescient call last year when he warned that US stocks were starting to look too expensive and began advocating for a shift into long-lagging international markets. 

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At the time, artificial intelligence was all the rage, the S&P 500 Index was scaling record highs and some strategists were doubling down on their optimism. Interest-rate cuts were coming, and investors were confident that President Donald Trump’s second term would trigger an economic boom.

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“When we were first talking about diversification, people were pretty skeptical,” Oppenheimer, 61, said in an interview in London. “We didn’t really think we had got it wrong. And we got a lot of reception when the US did start to underperform in the first quarter of this year.”

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Even with the surge in US stocks from the depths of the April selloff, diversifying has paid off. MSCI Inc.’ s all-country index that excludes the US has rallied 17% this year, outpacing an 8.6% advance in the S&P 500.

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The strategist — an industry veteran of 40 years who joined Goldman Sachs in 2002 — spoke to Bloomberg News about the outlook for equities into the year end, the evolution of market behavior and forecasting since the 1980s and some of his most memorable calls. The interview has been edited for length and clarity. 

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What do you make of the market performance this year, the slump and subsequent return to record highs? Are stocks adequately reflecting tariff risks?

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After the market fell 20% roughly this year and there was quite a strong rally, we did think that it would reverse again because at one point we also thought there was going to be a recession. When our economists changed their view about a recession, we argued that this was an event-driven bear market and probably wouldn’t reverse the rebound.

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It’s too early to be sure. It could be that we still end up with bigger tariffs and we do have a recession, which the market’s not pricing. It’s increasingly taking the view that you’re going to get interest-rate cuts in the US because inflation is moderating. Also that the tariff deadline doesn’t matter because it’s put in place to force a deal rather than going to be binary to a specific day.

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While the market may be right to be much more confident, given that valuations have gone up again and risk premia have come down in equities, there’s a degree of complacency. That’s another reason why we quite like the idea of diversification because the broader spread you have, the better risk-adjusted returns you have in a world where you can still get quite a lot of volatility.