'Risk appetite' for stocks is the worst since March, Goldman Sachs says
Recent bearish sentiment may prove a contrarian signal to add back to equities.
TL;DR
- Goldman Sachs now recommends an overweight position in equities for the next three months.
- This shift is based on a contrarian view, as the bank's risk appetite indicator turned negative for the first time since March.
- Investor sentiment has worsened recently, partly due to a selloff in artificial intelligence-related stocks.
- Goldman Sachs believes factors like strong earnings, lower stock valuations, and lighter investor positioning suggest future upside for equities.
- Other firms, including Wells Fargo and Macro Risk Advisors, have also observed increased bearish sentiment, seeing it as a positive signal.
- Goldman Sachs maintains an overweight recommendation for cash and is underweight credit.