Goldman Sachs: Volatility incoming
Goldman Sachs is issuing a rare warning to its clients of a market correction.
Goldman Sachs is calling for a big jump in the VIX index, which is a measure of equity volatility, in April.
It is calling for its clients to buy VIX call options, which is a bet that volatility is going to jump. They say it is a hedge against an equity correction.
That is implicitly saying that stocks are facing a correction.
The VIX is currently at around 15. Goldman is projecting VIX at 21 in April.
There are several potential catalysts for a correction:
Macro events, including central bank meetings (Bank of Japan, Federal Reserve)
Upcoming earnings season
Election-related catalysts
Portfolio Implications
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