Will it drag down Bitcoin? Goldman Sachs warns: Risk of U.S. stock correction is rising

Since the beginning of this year, with the theme of artificial intelligence (AI), large technology stocks such as NVIDIA and Apple have driven the US stock market to continue to rise. The S&P 500 Index, one of the four major US stock indexes, has hit 31 consecutive record highs. .
However, Goldman Sachs Group reminded investors in a recent report that the risk of a correction in U.S. stocks is gradually increasing. Now may be a good time to put the brakes on. Investors should remain appropriately cautious and use appropriate hedging strategies to hedge risks.
Goldman Sachs analysts: 4 major factors are bearish on U.S. stocks
Analysts pointed out that the risk factors that are currently increasing include:
The U.S. deficit continues to expand. This year’s deficit is expected to reach $1.9 trillion, an increase of 4,000 US dollars from the expectation 4 months ago. billion
Retail investors and institutional investors are continuing to increase stock exposure
Compared with Q1 this year, the popularity of US stocks in Q2 is mainly driven by a few stocks. History shows that as the concentration of gains increases, the risk of callbacks will also increase accordingly
US GDP Growth is expected to slow from 4.1% in the second half of 2023 to an estimated 1.7% in the first half of 2024, while the unemployment rate will rise from 3.5% to 3.8% on a three-month moving average basis. Goldman Sachs noted that the economy is expected to continue weak growth due to lower real income growth and softening consumer sentiment.
Therefore, Tony Pasquariello, head of global hedge fund business at Goldman Sachs Group, suggested: Given the current low hedging costs, investors can provide hedging strategies for their investments through instruments such as put options while retaining high-quality holdings. As the global election cycle unfolds, market volatility is likely to gradually increase. The current 10-day volatility of the S&P 500 Index is only 5%, which is at an extremely low level.
However, Tony Pasquariello also said that his warning did not mean that investors should flee the market, but called on investors to remain cautious and disciplined. He pointed out: As long as the economy and corporate earnings continue to grow, sharp sell-offs rarely occur.
JPMorgan Chase: The S&P 500 Index will fall to 4,200 points by the end of the year
Relative to Goldman Sachs’ cautious view, JPMorgan Chase analyst Marko Kolanovic is more pessimistic. As one of the most bearish experts on U.S. stocks, he predicts that the S&P 500 Index will fall to 4,200 points at the end of the year. Will fall to 4,200 points by the end of the year: The S&P 500 will fall 23% from the current level by the end of the year, falling to 4,200 points.
Will Bitcoin be dragged down by US stocks?
As Bitcoin’s correlation with U.S. stocks has reached an 18-month high in June, Bitcoin’s 30-day correlation with Nasdaq grew to 0.64 in early June for the first time since 2022.
Therefore, if the U.S. stock market experiences a sharp correction as experts predict, it may trigger continued selling of Bitcoin, so investors are advised to be cautious.

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