According to Bloomberg News, Goldman Sachs Group Inc is alerting giving words of caution to the dip buyers intending to take a plunge back into the stocks.
The volatility of December has still had room to run and the indications are still not congenial for the buying signals. Different types of challenges related to trading will be seen following Federal Reserve’s hawkish tilt after the omicron variant starts spreading, as per the managing director of asset allocation and portfolio strategy Christian Mueller-Glissmann of the firm.
Following a selling wave, which brought down almost everything right from Bitcoin to big tech, it was found that the Risk Appetite Indicator of Goldman Sachs is below zero and this could still be farther, as per the firm.
According to Mueller-Glissmann in an interview said, “Without any view on better macro you would want the RAI closer to -2 before adding risk”. “A drop below or near -2 could create a very good opportunity to re-risk and position more procyclical, especially if growth stabilizes post-omicron”.
Bloomberg News also reports that the contrast caution as indicated by him is a turnaround related to the risk assets in the current week on indications that the new coronavirus strain will not be as virulent and deadly as people are expecting and will not drive off-course the recovery in the economy. Meanwhile, a Deutsche Bank AG implies that risk assets might be closing in at the bottom.
The volatility markets are showing sentiments that are fragile. For the purpose of hedging, the investors are shelling out against wilder oscillations as compared to what had been experienced already. The run of turbulence of last week is the worst so far in the current year and the S&P 500 notches up or down by at least 1% on 5 consecutive days through Friday.
