Need to Know: Get ready for $900 billion of stock purchases this year, says Goldman Sachs. Here’s who’s buying.

“While bad, our economy appears strong enough to survive rate hikes, inflation, oil prices, and a war in Europe,” he added.

And our call of the day from Goldman Sachs sees retail “diamond hands” and corporate buybacks driving stock purchases from herre.

“Diamond hands” is Reddit message board parlance for those investors who hold on to volatile assets, resisting pressure to sell. Goldman forecasts households will scoop up $150 billion in stocks this year, as that asset class still looks better than beaten-down bond yields. The bank’s economists see 10-year Treasury yields hitting 2.7% by year-end from 2.48% currently.

Households had already been rotating away from bonds and cash into equities year-to-date, with Goldman data showing equity funds have attracted $85 billion in flows since early 2020, against nearly $2 trillion for U.S. money market and bond funds.

The bank expects foreign buyers to scoop up $50 billion in U.S. equities, which look like a haven asset given the economic and geographic distance from the brutal conflict in Ukraine.

But the biggest source of stock buying for the rest of the year will come from the corporate side, with high cash balances and solid earnings growth supporting that demand. The bank expects all-time high net corporate equity demand of $700 billion for 2022.

Look to mutual and pension funds to supply $900 billion of that equity, said the Goldman team.

“Rising interest rates and strong trailing equity returns have likely aided the funding levels of U.S. pension funds,” said Goldman, which expects $400 billion in stock sales from that side. Mutual funds are likely to sell $500 billion as a shift from active to passive investing continues, Kostin and the team said.

The buzz

Tesla stock
TSLA,
+7.79%
is surging on a proposed stock split.

Stock in Poly
POLY,
+50.15%
are surging after HP
HPQ,
-4.76%
said it would buy the headset maker for $3.3 billion. HP shares are down.

Financial hub Shanghai will lock down in two phases this week for citywide mass COVID tests, as cases surge. Among companies affected, Tesla
TSLA,
+7.79%
is said to be pausing production at its Shanghai “Gigafactory” this week.

The Russian offensive against Ukraine continues, but President Volodymyr Zelensky said his country could declare neutrality and offer security guarantees to Russia. Negotiators head back to the table in Turkey.

Highlights of a busy week for data include the Fed’s favorite inflation indicator and U.S. jobs numbers for March. Ahead of that, the February trade deficit in goods fell for the first time in three months.

Apple
AAPL,
-0.19%
reportedly may cut iPhone SE and AirPod production due to weaker demand amid war and inflation worries.

“CODA” delivered the first best-picture hit for Apple
AAPL,
-0.19%,
though overshadowed by that was actor winner Will Smith slapping comedian Chris Rock onstage just before picking up the best actor award. Here’s some of the reaction:

The markets

Stocks
DJIA,
-0.48%

SPX,
-0.05%

COMP,
+0.34%
are mixed, while oil
CL00,
-7.97%

BRN00,
-7.24%
is cratering as Shanghai lockdowns spark demand fears. Bond yields
TMUBMUSD10Y,
2.423%
are mixed , with the Bank of Japan stepping up with an offer to buy unlimited 10-year JGBs. The dollar
DXY,
+0.47%
is up and gold
GC00,
-0.86%
is off by $17. Bitcoin
BTCUSD,
+3.20%
also continues to climb, up around 7% to $47,700.

Top tickers

These were the top-searched tickers on MarketWatch as of 6 a.m. Eastern Time:

Random reads

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