Scott Rubner, a strategist at Goldman Sachs, warned that US stocks could fall further.
When clients asked Rubner if the recent correction in the stock market meant that the reduction in positions last week was enough, Rubner said, "my answer is no."Godofwarragnarokcrashingps5He points out that Goldman clients have been cutting their exposure when the stock market rises.
Goldman's trading desk estimates that commodity trading advisers (CTA) will sell stocks in the coming week based on the model, regardless of how the market moves.
In addition, institutional-sized put options and hedging demand outstripped volatility selling strategies for the first time this year, suggesting that large investors are scrambling to prepare for further falls in the stock market. This is also reflected in the VIX index, which surged above 20:00 last week and is still well above its 2024 average.
Other reasons for caution about the stock market include poor liquidity, dealer options positions and a lack of retail demand for call options after tax in the US on April 15. Liquidity has fallen 66 per cent since the start of the month, according to Rubner.
Before Monday's rebound, the U. S. stock market had fallen for six consecutive days.