12 hours ago
1
Hillary Remy
Sat, May 16, 2026 astatine 12:17 PM CDT 7 min read
The banal marketplace has been rallying hard. Earnings person been strong. Investor assurance has surged. On the surface, it looks similar a textbook risk-on environment. Goldman Sachs agrees with that read.
And it thinks that's precisely wherefore investors should wage adjacent attraction to what it's seeing close now.
The slope published a enactment connected May 13 titled "Macro Headwinds vs. Micro Tailwinds," authored by strategists Andrea Ferrario, Christian Mueller-Glissmann, and Alessandro Giglio. What it recovered has not been seen successful markets since 2000.
Goldman's Risk Appetite Indicator conscionable deed its highest level since 2021
Goldman's proprietary Risk Appetite Indicator roseate supra 1.1 this week, surpassing the elevated levels seen astatine the commencement of 2026 and reaching the highest speechmaking since 2021, according to Seeking Alpha. That places the existent speechmaking successful the 99th percentile of each observations since 1991.
Using a longer humanities proxy extending backmost to 1950, the indicator has spent lone 2% of its clip supra 1.0. The level it has reached is genuinely rare.
The rebound successful hazard appetite has been driven by a operation of optimism astir an extremity to the Middle East conflict, beardown net maturation crossed regions, and a tech-sector assistance fueled by AI-related superior spending. Investor positioning has besides broadly turned much bullish, reversing astir of the antiaircraft displacement that followed the commencement of the Middle East warfare successful precocious February.
Both the macro communicative and the firm net communicative are pulling successful the aforesaid absorption close now, and markets are pricing successful a large woody of that optimism simultaneously.
Why operation of hazard appetite, equity momentum is much alarming signal
Elevated hazard appetite alone, Goldman notes, is not a reliable awesome to crook bearish. Investor assurance tin stay precocious for extended periods erstwhile macro conditions enactment supportive, and the slope has seen that signifier repetition crossed aggregate cycles. The much antithetic improvement successful this enactment is what's happening with equity momentum astatine the aforesaid time.
More Wall Street:
-
JPMorgan resets S&P 500 terms people for the remainder of 2026
-
Vanguard challenges the S&P 500 arsenic a one-stop strategy
-
Goldman Sachs resets Broadcom banal forecast
The one-year rolling z-score of U.S. equity momentum roseate supra 3.0 past week, 1 of the strongest readings since 2000. Goldman's investigation shows determination has historically been nary beardown nexus betwixt hazard appetite and equity momentum, which makes the existent infinitesimal much exceptional than either speechmaking unsocial would suggest.
This is the archetypal clip since the commencement of 2000 that the bank's Risk Appetite Indicator has been supra 1.0 and the equity momentum z-score has simultaneously been supra 3.0.
English (CA) · 
English (US) · 
Spanish (MX) ·