Global geopolitics might be uncertain, but our economy is becoming more normalized, with the steady economic growth, cooling inflation and resilient employment numbers offering an interesting landscape for investors to seize opportunity. That was the takeaway of a group of Goldman Sachs experts at a webinar Tuesday morning.

Alexis Deladerrière, a partner at Goldman Sachs Asset Management who serves as head of international developed markets equity, said that this year’s amazing returns (specifically that in the MSCI World Index, which returned 12% through June) have even held up on annualized basis since right before Covid. That’s paid off big for long-term investors who have stayed invested despite “disruption from Covid, the war in Ukraine, spiking inflation and interest rates.”

What’s unique now, however, is the concentration of equity markets, he said. “If you take the first half, only two of the 11 sectors have outperformed the market this year: IT and communication services. Only 27% of stocks have outperformed the index.”

Deladerrière spoke along with Jeffrey M. Fine, global co-head of alternatives capital formation at Goldman, and Lindsay Rosner, a managing director in fixed income and liquidity solutions.

Rosner, in a discussion about bonds, said that though unemployment has ticked up slightly, mostly these are the kinds of numbers the Fed wants to see: a labor market that’s cooling and normalizing so it won’t spark a new bout of inflation. With the core personal consumption expenditures (or PCE) index at around 2.5% annualized, down from a 5.5% peak, Goldman believes the Fed will likely start cutting interest rates in September, Rosner said.

“Four central banks in the developed markets have already begun their cutting cycle. Pivots are in place and they will happen,” she said. According to Goldman’s “Mid-Year Outlook 2024,” emerging markets (with a couple of exceptions) have already been cutting rates for a year and disinflation is continuing in these markets.

Rosner said that corporate balance sheets are strong, and banks are wide open for helping companies refinance. While refinancing is more expensive under the current interest rate regime, the need to fund capital expenditures can be achieved with some of the nominal growth corporations have enjoyed.

Consumers, meanwhile, are “choosy,” she said. “The consumer is choosing what they’re going to spend on; they’re also choosing what they are going to pay off. And so we have a consumer that is employed. That is the most important piece of the puzzle. They are spending. But they are being more particular in terms of what they’re spending on.”

That means more people shopping at Walmart, more people buying generic or finding price points that fit them. And she said there are not high numbers of delinquencies among borrowers on things like mortgages or auto payments leading to impairment.

“This is a soft landing, a good backdrop especially for investing in bonds,” she said. “We’ve had the highest yields we’ve had in over a decade.”