Goldman Sachs Group Inc. and BlackRock have turned even more bearish on equities in the short term. He warned that markets have not fully priced in the risk of a global recession.
Goldman Sachs strategists said rising real rates were the main headwind and underweight equities in their global allocation over the next three months. Maintained overweight in cash. BlackRock advised investors to “avoid most stocks.” The firm added that it is tactically underweight developed market equities.
Goldman Underweights Equities in Global Asset Allocation
“Current levels of equity valuations may not fully factor in the associated risks, and further declines may be needed to reach a bottom,” Goldman strategists led by Christian Muller-Grismann said in a note Wednesday. pointed out.
According to the firm, the recent crash in bond markets has pushed the market to suggest a recession probability of more than 40%, indicating a historically high downside risk for stocks.
BlackRock Investment Institute strategists Jean Boavan and Wei Li also wrote in a report Wednesday that a “soft landing” would see inflation return quickly to target levels without slowing economic activity. We do not expect ,” he said, adding, “Thus, we expect more volatility and pressure in risk assets.”
Goldman Sachs U.S. strategists led by David J. Kostin last week lowered the year-end target for the S&P 500 index to 3,600 from 4,300. Sharon Bell and other EMEA strategists have also lowered their targets and earnings forecasts for European equities.
Original title:Goldman to BlackRock Sour on Stocks as Recession Fears Take Hold(excerpt)