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Investing.com - Goldman Sachs identifies policy news, Tuesday’s ISM services data, and Federal Reserve official speeches as crucial market catalysts for the week ahead, following a period of increased market volatility. The S&P 500, currently trading at $630.41 and just 1% below its 52-week high of $639.85, continues to show resilience despite recent market fluctuations.InvestingPro data reveals several key strengths in the current market, with additional insights available to subscribers looking to navigate these volatile conditions.
The investment bank notes that S&P 500 average stock one-month implied volatility rose one point to 29, ranking in the 51st percentile compared to the past year, while realized volatility increased two points to 26, positioning in the 30th percentile, as markets reacted to challenging economic data.
With over 72% of S&P 500 companies by market cap having already reported earnings, Goldman Sachs indicates investor focus will shift to upcoming reports from Health Care, Energy, Utilities, and Semiconductor stocks, while market participants also digest macroeconomic developments.
Goldman Sachs highlights that S&P 500 index one-month put-call skew increased last week due to investor demand for puts and hedging, with index and average stock skew ending at their 98th and 74th percentiles versus the past year, respectively.
The firm suggests overwriting financial stocks appears attractive as their earnings season is largely complete, with relatively elevated one-month implied volatility of 24, ranking in the 57th percentile compared to the past year, and fewer short-term catalysts for volatility.
In other recent news, Goldman Sachs has adjusted its economic outlook for 2025, increasing its growth forecast for the fourth quarter to 1% from the previously expected 0.5%. This revision follows a 90-day suspension of retaliatory tariffs between the United States and China, which has also led Goldman to reduce the probability of a recession within the next twelve months to 35%. Meanwhile, Citi analysts have projected that the unemployment rate will rise to 4.4% in the upcoming June jobs report, with payroll job growth expected to slow to 85,000, indicating a cooling labor market. Additionally, Citi analyst Chris Montagu has highlighted concerns over stretched Nasdaq positioning, which could increase near-term profit-taking risks for the index. In the ETF market, JPM Delta One Desk reported stabilization in equity ETF inflows after a period of outflows, while Gold ETFs experienced significant outflows. Asset Managers have increased their long positions in S&P 500 futures, and leveraged funds have reduced their short positions in Nasdaq futures. Boston Federal Reserve President Susan Collins has advocated for a patient approach to interest rate changes amid economic uncertainty, emphasizing the need to assess a wide range of incoming data.
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