Goldman Sachs on the Next Step for U.S. Stocks: The April Rebound May Have Exhausted Its Upside Potential, What is the Current Sentiment Among Retail Investors?

Goldman Sachs said that the biggest driver of the current market is still uncertainty, and investors have not really been bullish or bearish on the market. This article is from an article in the Wall Street Journal and is collated, compiled and contributed by Foresight News. (Synopsis: "India bombs Pakistan" conflict heats up!) Bitcoin breaks through 97,000, pay attention to Sino-US negotiations, Fed interest rate decision) (Background supplement: Micro Strategy spent another $180 million to "add 1,895 bitcoins", BTC consolidated 95,000, and U.S. stocks ended a nine-day winning streak) Goldman Sachs warned that bear market rebounds are the norm, and uncertainty dominates market movements. Over the past two weeks, U.S. stocks have rebounded sharply and have completely erased all losses since April 2. Goldman Sachs analyst Peter Oppenheimer recently said in his research report that the recent sharp rebound in the stock market may be just a typical bear market rebound, and the current market environment is a dilemma for stock investors. Oppenheimer believes that the biggest driver of the current market is still uncertainty, and investors are not really bullish or bearish on the market yet: "The asymmetry of stock investment is poor. A sharp rebound in a bear market is the norm, not the exception." "If U.S. tariffs are quickly rolled back and cause little lasting economic damage, this does indicate limited downside risk." But at current valuations, the upside is also limited." This market environment makes investing extremely difficult, and decisions are bogged down by obscure headlines. Market participants must choose between chasing a weakened rally and then risking a late exit, or missing out on another squeeze rally altogether. Tricky market conditions force investors to 'pinch their noses and buy' Many investors were forced to dump risky assets when the tariff outlook was uncertain in early April, but are now buying again on the rebound, and few investors have enough positions to fully benefit from the performance. Charlie McElligott, cross-asset strategist at Nomura Securities, described the current situation as "a disgusting stock trade and a scenario that nobody wants." McElligott confirmed in a report that the phenomenon of "pinching your nose and being forced to buy back positions" is playing out in stock index options, "although most investors are disgusted with future macro growth prospects." Historical data suggests a rebound may be approaching its limit From the data, as one of the most violent intra-month rallies in history, this rally may have exhausted its upside. According to media statistics, since 1980, global stock markets have experienced several bear market rallies, lasting an average of 44 days with an increase of 14%. While this year's global stock market decline cannot be officially called a bear market, prices have risen 18% from their intraday low on April 7. Peter Tchir, Macro View Strategist at Academy Securities, said: "Interest rates and risk assets will continue to be driven by news headlines. Policy and trading will drive the market in turn." Investor sentiment and positioning have become crowded John Marshall, managing director of Goldman Sachs, wrote in a separate report that financing spreads — which measure the need for long positions through equity derivatives such as swaps, options and futures — have been decoupled from recent stock market gains. "This suggests that macro investors have cut their equity positions during the recent strengthening." Marshall expects this week to be particularly volatile because of the U.S. Federal Reserve meeting this week, when "comments on June/July will be particularly important." Buying by systemic investors is growing steadily, which provides support for the rally. Goldman Sachs traders noted that buying by systemic macro investors climbed to $51 billion last week and is expected to buy $57 billion this week. "The total purchase size is not insignificant, but it is not much larger either, because if the signal flips quickly, it reduces the real-time speed of the flow of funds and the volatile environment is higher than before." Other buying flows, which were supportive during the rally, arguably look more nervous. JPMorgan's tactical position monitor is currently neutral, with a one-week change showing a "moderate increase in positions." Hedge fund leverage rebounded sequentially and is now in its long-term 96th percentile. At the same time, retail investors continue to increase their risk positions. John Schlegel, head of J.P. Morgan's Location Intelligence team, said: "Retail investors have seen the strongest buying month in our profile since 2017, buying both individual stocks and ETFs." Related stories How do stablecoins unlock the potential of the mega market as they drive global cross-border B2B payment innovation? Jen-Hsun Huang wants to buy Bitcoin? How credible is Nvidia's consideration of "buying BTC" as an AI strategy? Yang Jinlong clarified the "truth about the explosion of the Taiwan dollar": the central bank was not instructed by the United States, and the market was full of false information to interfere with expectations (Goldman Sachs looks at the next step in US stocks: the April rally may have exhausted the upside, what is the current sentiment of retail investors? This article was first published in BlockTempo's "Dynamic Trend - The Most Influential Blockchain News Media".