Goldman: Despite the consensus economic optimism among clients and strong recent performance of cyclical equities, we think markets are still not fully pricing the likely strength of the US economy next year.

Specifically, sector rotations within the equity market appear to be pricing an outlook for only slightly above 2% real GDP growth. Our Global Markets team's cross-asset tools suggest a slightly more conservative growth outlook that is roughly in line with the consensus forecast.

The recent performance of the equal-weight Industrials, Consumer Discretionary, and Financials sectors vs. the equal-weight Consumer Staples and Utilities sectors has correlated closely with the Cyclicals vs Defensives pair but [also] suggests a slightly less optimistic growth outlook, closer to that of the cross-asset factor.