Bank cut Goldman Sachs His recommendation is to weigh stocks in investment portfolios over the next three months with increased cash flow.
The bank pointed out that the rise in real yields and the increasing possibility of a recession reflect the continuing decline of stocks.
The bank added that the probability of a recession in the market rose to 40% in the wake of the recent sell-off on bonds, which historically indicates a high risk of a stock decline.
Goldman Sachs’ views reflect growing investor fears that the Federal Reserve’s determination to curb inflation will push the global economy into recession, meaning financial market turmoil will continue.
This comes after lowering expectations for the Standard & Poor’s index to 3600 by the end of the year.
The bank said investment grade credit returns are attractive in absolute terms compared to equities.