Goldman Sachs predicts correction on world stock exchanges, but removes risk of 'bear market'

Instead of predicting a 'bear market', the Goldman Sachs division led by Peter Oppenheimer says in a note released Tuesday that the risks of a stock market correction are growing, but that investors should not abandon the boat. .

Goldman Sachs analysts, cited by Bloomberg, say that while the risk of a correction in the stock market indexes is increasingly high, stimulus measures and the nature of the economic crisis make a bear market unlikely.

"In our opinion there is a risk of a correction, but without an inflection to the 'bear market'", they defend. US investment bank analysts recommend taking advantage of any downturn to buy shares.

Instead of predicting a bear market, the Goldman Sachs division led by Peter Oppenheimer says in a note released Tuesday that the risks of a stock market correction are growing, but that investors should not abandon the boat.

The investment bank hopes that tactical risks will eventually give way to a new bull market and steady gains. Investors should look through short-term volatility and buy on any correction, the bank argues.

The global stock indexes have risen more than 70% since the selling wave caused by the coronavirus in March last year, reaching a record at the beginning of the month with the bets on the economic recovery driven by vaccines and greater stimuli in the USA.

The strong recovery was "almost identical" to the recovery from the minimum recorded in the financial crisis in 2009, which was followed by a correction, Goldman notes.

"Stocks are, so far, closely following the same recovery trend seen after the global financial crisis over a decade ago," said analysts led by Peter Oppenheimer in the research note reported by Bloomberg. Prices recovered quickly from the recession-induced falls as investors rushed to try to profit from the recovery of the economy in general.

While the global financial crisis generated a structural “bear market”, the recession and the selling wave caused by the coronavirus were determined by hard facts.

“The unprecedented speed and scale of policy support during the pandemic, designed to reduce the risk of long-term scarring, also reduced the risks of a structural impact, allowing investors to 'look beyond' the crisis towards recovery” , defends the investment bank.

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