From rebounding copper prices to cyclical stock sectors leading gains, from climbing bond yields to renewed dollar momentum—global financial markets are undergoing a broad and profound repricing, with the core logic pointing to a reassessment of US economic growth prospects.

Goldman Sachs' Andrea Ferrario team reported that the bank's risk appetite indicator hit 0.75 last Thursday, reaching its highest level since January this year. This market repricing is driven by more optimistic growth expectations, with Goldman's PC1 "global growth" factor posting one of its strongest rebounds since 2000 over the past three weeks.

Cyclical assets have particularly outperformed in this repricing. Materials and financial sectors led global equity gains, while US growth pricing is catching up with other regions after lagging earlier this year. Meanwhile, most bond markets saw sell-offs, with rising real rates becoming the primary driver of higher yields.

Goldman strategists note that current US stock valuations reflect 2026 real GDP growth near the consensus estimate of 2.0%, still below Goldman's 2.5% forecast. This suggests the repricing process could continue if economic data keeps exceeding expectations.

**Growth Reassessment Hits Multi-Year Highs** Goldman's risk appetite indicator reached 0.75 last Thursday, its highest since January. This rally in risk assets is primarily growth-driven, with the PC1 "global growth" factor achieving one of its largest three-week gains since 2000.

Such substantial growth reassessments typically occur early in economic cycles, making this late-cycle rebound particularly notable given the PC1 factor was already above zero. The market's growth repricing aligns closely with global macroeconomic surprise indices, as both developed and emerging markets recently delivered better-than-expected data.

Key US economic data this week—including Tuesday's nonfarm payrolls and Thursday's CPI—will test this optimism. Goldman forecasts 55,000 November job gains with unemployment rising to 4.5%.

**Cyclical Assets Rally Broadly** The repricing shows distinct cyclical patterns across regions. Within equities, cyclical sectors significantly outperformed defensive ones, led by materials and financials. Goldman projects 12% 2026 EPS growth for the S&P 500.

In bond markets, rising 10-year yields in US and German debt mainly reflect higher real rates, with inflation pricing lagging the cyclical asset rebound. UK gilts performed relatively better due to disappointing British data. While multiple G10 central banks see policy expectations shift from cuts to hikes, Goldman's rates team notes bidirectional risks in current pricing.

Commodities also benefit from improved growth expectations. Copper—a key economic barometer—has strengthened recently, while gold shows resilience despite dollar strength and higher real rates.

**Portfolio Strategy Adjustments** Goldman maintains a moderately pro-risk 2026 allocation: overweight equities (3- and 12-month), neutral bonds/commodities/cash, and underweight credit.

The bank emphasizes diversified hedging strategies to protect equity overweights, recommending front-end rate receivers, CDS buying, and cyclical sector put options as effective hedges against growth shocks.

Valuation-wise, US stocks currently price in growth near consensus but retain upside potential. Should data—particularly US growth hitting Goldman's 2.5% forecast—keep surprising, this repricing trend may persist.

The global repricing of accelerating US growth spans traditional cyclical indicators to equity valuations. Its sustainability hinges largely on whether upcoming data validates current optimism.