REUTERS/Ralph OrlowskiGoldman Sachs doesn't find stocks appealing anymore.

In a note Tuesday, the firm downgraded equities to “Neutral” over the next year.

“Until we see sustained earnings growth, equities do not look attractive, especially on a risk-adjusted basis,” wrote Christian Mueller-Glissmann, an equity strategist.

“We expect particularly poor returns in dollar terms, with our forecast of a stronger dollar and the prospect of less negative equity/FX correlations.”

It's virtually anything but stocks for Goldman; Mueller-Glissmann and team are “Overweight” cash on a three-month basis and think credit valuations are much better than stocks.

Bond yields have fallen amid reassurance from the Federal Reserve of slow interest-rate hikes and higher demand from foreign investors. The dollar has weakened, and commodity prices have gained.

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