HomeFinancial MarketsGoldman Strategists Expect Stock Volatility to Spike

Goldman Strategists Expect Stock Volatility to Spike

Stocks are expected to spike in volatility during the later stages of 2023, strategists for Goldman Sachs Group Inc. commented. As a result, they recommend that investors who are keen to invest remain alert when it comes to potential turbulence in the market.

Led by Christian Mueller-Glissmann, the Goldman Sachs team wrote in a note that while continued economic growth and cooling inflation have so far contained aggressive swings, recent market volatility, and weaker economic data are giving rise to the potential for greater price fluctuations.

Based on their model assessing a combination of macroeconomic factors, market indicators, and broader uncertainties, Goldman strategists have attributed a 54% chance of high volatility on the S&P 500. In contrast, the team has only provided a 39% chance of moves being milder.

While bond markets have expressed high volatility this year, stocks have remained fairly steady as investors remain confident that slowing growth will convince the Federal Reserve to cut interest rate hikes. Now, volatility across the banking sector and other markets has led to uncertainty, thereby reducing the predictability of the direction in which the market will advance.

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