The Blubber

Per Business Insider

Goldman Sachs has just shared their bullish estimates regarding the S&P 500, saying they believe that the index could rise by 7% over the next 12 months. However, the bank's economists also shared that there was still a 25% chance that a recession could happen.

This comes as in the next 12 months, the S&P 500's would reach 4,700. However, should a recession happen, it could see the index dropping down to a low of 3,400.

"We prefer to maintain upside exposure to equity while utilizing the options market to hedge the potential 23% downside in a recession scenario,"

The note by Goldman Sachs towards its investors encouraged them to hedge for many reasons, including "mega-cap rally narrowed market breadth." It was also noted that downward breadths were previously followed by the S&P 500 significantly sliding down.

In mid-March, Goldman Sachs increased its 12-month US recession probability by 10% to 35% before returning to its now 25% estimate.

In September 2022, Goldman Sachs reportedly stopped at 16% for the S&P 2500 2022 target as the Feds showed signs of a rate-hike slowdown. This came as bank analysts expected central bank interest rates to be higher than previous estimates.

See flow at unusualwhales.com/flow.

Other News:

• Goldman Sachs Stops at 16% for S&P 2022 Target as FED Shows Signs of Rate-Hike Slowdown
• Goldman Sachs increases 12-month US recession probability by 10%, now at 35%

Resources:

Business Insider