CoinDesk Reports:
Major US banking titan Goldman Sachs has just issued a warning to investors.
According to Investing.com, in a new report to clients, the company’s strategists indicated that a series of fundamental factors suggest an imminent market adjustment.
Goldman Sachs highlighted that declining real income growth at the start of the second half, slowing GDP growth, and weakening consumer sentiment are adverse factors.
Strategists noted potential overvaluation in stocks and pointed out that the S&P 500 index has recently outperformed other markets by a significant margin.
They also highlighted the rising concentration of stocks as an additional negative factor, with the weight of the top ten companies in the index being the highest since 1929.
The Goldman team suggested that the election cycle could also serve as a short-term negative catalyst.
“In the coming months, concerns about elections in the US and Europe could also dent consumer and business confidence.”
Goldman stated that data does not indicate an imminent long-term bear market, pointing out slight economic expansion and the possibility of rate cuts as positive factors.
However, the team noted that this “does provide a warning signal that a period of adjustment with higher volatility and lower returns is more likely now.”
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