From: Faith Kates To: Jeffrey Kogan Subject: FW: Goldman Sachs Investment Strategy Group: "The Optimism is Justified" Date: Mon, 27 Jul 2009 19:51:27 +0000 Attachments: The_Optimism_is_Justified.pdf From: Shamasdin, Jamil [mall Sent: Monday, July 27, 2009 To: Faith Kates Subject: Goldman Sachs Investment Strategy Group: "The Optimism is Justified" Faith, Please find below (and attached) the most recent market overview from our Private Wealth Management Investment Strategy Group. We hope that you find this helpful, and please let us know if you have any questions. Best regards, Your Goldman Sachs Team (Ward. Leslie. Ben. Chris, Jamil. HT. Colleen. Kimberly. & John) July 27, 2009 The Optimism is Justified With a generally favorable earnings season in full swing with 55% of companies in the S&P 500 reporting earnings for the second quarter of 2009 and a slew of economic data pointing to either further stabilization or in some cases actual improvement, global credit markets have rallied to reach highs not seen since June of last year and global equity markets are back to levels not seen since early in the fourth quarter of last year. In the US, the S&P 500 closed at 979.3 on July 24th, for a price return of 46.9% from its trough of 666.8 on March 6, and a total return of 48.1%. Meanwhile, MSCI EAFE had a price return of 52.2%, MSCI Emerging Markets a return of 81.3%, and the high yield market as measured by the Barclays US corporate high yield Index had a total return of 49.1% from its trough on December 12. It is interesting to note that, as was the case in the 2003 market recovery, US equities and high yield securities have had very similar total returns. Given the strong support from favorable earnings, let's first review the earnings results reported over the last few weeks. EFTA00773069