Goldman's 'Bull/Bear' Indicator Is "Flashing Red"

The end of the first half of the year marks the end of a very powerful rally in risk assets that started in October last year that has taken global equities roughly 30% higher. The first half of 2024 has been the 21st best since 1900 for the US market.

The upswing reflected an inflection point in optimism that began with positive news on US inflation and growth and promoted a sharp recovery in equity prices as the combination of soft landing and rate cuts became priced. While the seven US rate cuts that were priced at the start of this year have since faded, equities have been buoyed by a string of positive macro surprises and optimism around AI helping the Nasdaq generate a Sharpe ratio of 2.3 over the last twelve months.