Goldman Sachs Strategists Report Bullish Sentiment Among Investors
Investors Show Confidence in Market Sentiment
Goldman Sachs strategists indicated that investor positioning and sentiment have reached significant highs, with bullish sentiment prevailing among investors. The positioning and sentiment indicator has risen above the 60th percentile, showcasing a clear trend towards bullishness among market participants.
Indicators Reflect Strong Bullish Sentiment
Various indicators, including surveys and CFTC futures positioning, have consistently displayed strong bullish sentiment in recent months. Additionally, equity and credit flows have seen an increase, with the Goldman Sachs Risk Appetite Indicator (GSRAII) surpassing the 0.8 threshold, contributing to the overall rise in positive market sentiment.
Broadening of Bullish Shift Across Assets
Goldman Sachs noted that a significant number of indicators are now above the 80th percentile compared to their historical levels, indicating a broadening of the bullish shift across different assets and investor categories. This suggests a widespread positive sentiment in the market.
Market Concentration Remains High
Despite the bullish sentiment, market concentration remains notably high, particularly in equities. The ‘Magnificent 7’ and ‘GRANOLAS’ groups exhibit low options skew in the US and record lows in Europe, highlighting the concentration in certain market segments.
Strong Start for Momentum Strategies
Momentum strategies have seen one of their strongest starts this year, with hedge funds increasing their gross exposure to record levels. While the macroeconomic landscape remains resilient and the US earnings season positive, investors appear to have concentrated positions, posing potential risks.
