Stock market corrections, equity bear market happening soon? Goldman Sachs experts have these to say

Goldman Sachs has warned that the equity drawdown risk has picked up with the commencement of 2025. The investment banking firm has predicted that the probability of an equity drawdown has gone up to around 30 per cent. While this level is above unconditional, it is still far from previous peaks and historically the most extreme outcomes have happened only after the probability crossed 35 per cent, according to the Economics Research document prepared by Goldman Sachs.

US investors to face wrath of market correction soon?

Goldman Sachs' asset allocation remains modestly pro-risk into 2025, even as the analysts focus on selective tail risk hedges given the higher drawdown risk.

While there have been apprehensions about the risk of an equity bear market, Goldman Sachs stated there won't be any fear as long as growth remains strong. However, correction risk has picked up with higher valuations, less negative inflation momentum and higher policy uncertainty - high equity concentration in the US also increases risk, Goldman Sachs stated in its Portfolio Strategy Research document.

FAQs:

Q1. Has the US stock market crashed?
A1. No, the US stock market has not crashed in recent years; instead, it has been on a major bull run for a major part of two years now.

Q2. Can a US recession arrive soon?
A2. There are chances of a US recession in some time, but for now, the fears of it has subsided, as per latest reports.