The Post Modern Cycle – Navigating the Capex Boom

研报英文原文证据摘录

The Post Modern Cycle – Navigating the Capex Boom

Goldman Sachs Global Strategy Paper

So while the era of zero interest rates generated high equity and bond returns, the

spread within equity markets was very wide. The US consistently outperformed other

equity markets, and technology was the strongest driver of returns by sector

resulting in growth consistently outperforming value (Exhibit 11).

Exhibit 11: US consistently outperformed other equity markets, and technology was the

strongest driver of returns by sector

Relative price performance (in USD)

250%

Returns: 2009-2022

200%

150%

100%

50%

0%

Global Tech vs. World ex. US vs. RoW Global Growth vs. Value USD Trade-Weighted Index

TMT

Source: Datastream, FactSet, Bloomberg, Goldman Sachs Global Investment Research

From 2022: The ‘Post Modern’ cycle

As record low interest rates began to rise following the Covid pandemic, structural shifts

in several fundamental drivers started to take place:

1. Higher cost of capital. For the first time since the 1970s, the pandemic resulted

in rising inflation and, with it, a sharp increase in interest rates.

2. Rising government debt. The issues of moral hazard that weakened the case for

fiscal support after the financial crisis were no longer relevant.

3. Higher tariffs.

4. The questioning of the ‘rules-based order’ that had governed defence and trade

relationships over the previous 80 years.

5. Secure supply of energy and commodities becoming increasingly important.

6. The war in Ukraine and Iran leading to rising defense spending.

7. The emergence of AI and the dramatic increase in technology-driven capex.

The shift in the cost of capital

The supply chain disruption that followed the global pandemic triggered inflationary

pressures for the first time this century.