This is exchanges at Goldman Sachs where people from our firm share their insights on developments

currently shaping markets, industries, and the global economy.

I'm Jake Seawert, Global Head of Corporate Communications here at the firm.

Asset prices around the world have gotten off to a volatile start this year as investors raise concerns over the efficacy of policy maneuvers, particularly at the central bank level, and weakening emerging markets.

To discuss these trends, I'm joined today by Peter

Oppenheimer, the chief global equity strategist and head of European macro

research for Goldman Sachs. Peter, welcome to the program. Thank you Jake. So we've started off the year seeing partial rebound from the steep declines that in January and

February.

Do you see this as a sign of real stabilization or just a temporary law on an ongoing

period of volatility? I think on balance the latter, you know when we did our

outlook pieces for this year we described for equities the environment as fat and

flat a fat or wide volatile trading range with relatively flat returns and the

two main reasons for this were firstly that after several years of

QE in response to the financial crisis most equity markets had seen a major re-rating. In other words, their PE ratios had risen to quite high levels by historic

standards. They weren't particularly cheap. And secondly, the outlook for profit growth was moderating around the world.

Margins had hit a peak in the US.

Revenue growth was slowing alongside lower nominal economic growth

and lower inflation.

So the combination led us to believe that it's quite difficult to get broad

equity market rises in a significant way, contrary to the situation we've seen in recent years. And as we moved into the beginning of this year,

because of the intense focus on falling commodity prices, the fears about the

impacts of rising US interest rates, and also the focus on a China slowdown,

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