Welcome to our exchanges at Goldman Sachs markets update for Friday July 31st.

Each week we check in with a leader across the firm to get his or her take on what they're watching in the markets.

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

And today's guest is Christian-Muler-Gulisman of Goldman Sachs Research, Christian

heads asset allocation

research efforts within portfolio strategy.

And his team is out with a new report called

Balanced Bear Repair, Asset allocation

with the risk of fat and flat markets. We'll be talking about that research today.

Welcome to the program, Christian. Hey Jay, thanks for having me. So we've seen a pretty sharp

recovery in equity markets, a little bit of sell-off in bonds post the COVID-19

bear market what does that mean in terms of how expensive stocks and bonds look

respectively right now? Yeah I'm absolutely right it's been an absolutely remarkable recovery in equities who pretty much had the strongest kind of quarterly returns since the Great Depression.

Obviously following one of the deepest bare markets in history but still very remarkable but to us what's

particularly amazing is how little the bomb market has sold off and that tells you

already a bit about the drivers of this sharp recovery because the monetary support and of course

the fiscal support as well have been pretty integral and stabilizing risk appetite.

So Central Banks have really been anchoring the bond market and bond yields and as a result of that you have this big gap between the two.

But as a result of that, as you were saying already, both the bond market and equities look expensive right now.

If you look relative to the very long-run history that becomes particularly apparent

where equities are well above the 90th percentile in terms of their shill-pees and obviously bond yields are close to all-time

laws. And for a multi-acid investor that clearly poses a certain amount of concern with regards

...