Here's Goldman's Best Hedge Against Bullish Sentiment Extremes

Both market sentiment and investors’ positioning have increased sharply since the end of March on the back of optimism around a potential end to the Middle East war and strong earnings growth, boosted by AI capex.

Goldman's Risk Appetite Indicator (RAI) rose to 1.1 last week, surpassing the levels from the start of this year and reaching the highest read since 2021 – the 99th percentile since 1991...