It forecasts the S&P 500 to trade around the 4000 level in the next three months. Goldman Sachs is neutral on equity and credit, overweight cash and commodities, and underweight bonds. The bank’s team recommends buying equity-put spreads and says that selling volatility on safe-haven assets can reduce the costs of these hedges. “After the equity volatility reset and with event risk into the summer, we like buying option hedges,” the bank’s strategists said in a Tuesday research note. Read More: Fast-Money Quants, Human Traders Most Split on Stocks Since 2019 The team says that buying options to protect against sudden pressure on prices is a good idea, as these issues could flare up in the next few months. The approaching debt-ceiling deadline and concerns about the stability of the US banks could also be triggers for increased stock-market volatility, according to the team of analysts including Christian Mueller-Glissmann. This has pushed the exposure of systematic investors to above neutral for the first time since December 2021, according to Deutsche Bank calculations.īut because of this increased participation by quants, analysts at Goldman Sachs are now cautioning that stock prices are becoming more prone to sudden selloffs. ![]() ![]() The Cboe Volatility Index (ticker VIX) has been below the 20 level since late March. Quant investors have swooped into equities as strong first-quarter earnings and resilient growth in the US has kept a lid on volatility. (Bloomberg) - Goldman Sachs is urging investors to cushion themselves from the possibility of increased volatility in the next few months as Wall Street quants dive back into US stocks. The interpretation here is that, there are potentially three separate events that exert an influence on the stock price, occurring at frequencies of approximately 0.03, 0.17, and 0.36 days.
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