Goldman Sachs has downgraded its outlook on equities to "neutral" over the next 12 months, saying there's no particular reason to own them.
"Until we see sustained signals of growth recovery, we do not feel comfortable taking equity risk, particularly as valuations are near peak levels," Goldman said in a note Tuesday.
Goldman downgraded Europe and Japan equities to "neutral" over a 12-month view, while upgrading U.S. equities to "neutral."
"The Fed has been more dovish than we initially expected, and market impact and realization of policy divergence has slowed, creating a boost to the U.S. relative to Europe and Japan," it said. "A strong yen and euro are weighing on European and Japanese earnings, while negative rates weigh on their financials."
Central bank policy is expected to diverge as the U.S. Federal Reserve is expected to increase interest rates this year, while the European Central Bank and the Bank of Japan are expected to continue to ease. But Goldman said it may be easier to play that theme through currencies than equities as foreign exchange tends to be less volatile than stocks.