After Huge Repricing Of Right-Tail Risk, Top Goldman Trader Outlines At What S&P Level To Start Hedging

Early last week, top Goldman Sachs trader wrote that the right tail at the broad index level was underpriced, as client consensus was that SPX was capped in the 6800-6900 range on a geopolitical resolution.

Interestingly, it was clear from our flows / conversations since the beginning of April that the 2nd derivative of clients’ mindsets had already shifted even before the ceasefire to finding secular themes to be long (primarily AI and AI infrastructure), as the view was that the geopolitical conflict was past “peak escalation.”

First, what is the economic impact of the conflict thus far?