FAST FIVE: With Stocks The Most Overvalued In History, Goldman Lists The 4 Biggest Risks

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For this reason, Energy sector rallies alongside the Saudi Arabia facility bombing and the most recent US-Iran tensions, which lifted spot prices but not long-dated prices, have been short-lived.

The dollar fell by 2% in December as US-China trade tensions eased and global economies showed signs of improvement.

Based on Goldman's top-down earnings model, the bank estimates that every 10% change in the trade-weighted dollar equals roughly $3 (2%) of S&P 500 EPS.

While the ISM non- manufacturing index was above consensus, the ISM manufacturing index unexpectedly declined to the lowest level since 2009.

Goldman economists expect US real GDP growth will equal 2.2% in 2020, above consensus of 1.9%, as the easing in financial conditions lifts economic activity; as a result of central bank easing in 2019, the forward P/E multiple expanded from 15x to nearly 19x.

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