Thursday, 28 January 2021 14:59

Goldman Says This is the Biggest Risk to Markets in 2021

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(New York)

Goldman Sachs has been one of the biggest bulls on the street so far in 2021. The bank is calling for 6.6% GDP growth and a strong year for the S&P 500. However, in the last week they have been backtracking a bit and pointing out some of the key risks to the economy and market. Whether or not investors like it, Goldman has a very clear risk risk—COVID variants. The bank says that if the new variants make the current vaccine ineffective, then all bets for the market are off. Based on the current science, that seems unlikely to happen. But nonetheless, there are intermediate risks, such as the new variants slowing down herd immunity or making consumers more fearful about going out/spending/the economy, both of which could have unforeseen negative consequences on the economy.

FINSUM: The new virus strains are a big risk. While the current vaccines don’t seem likely to be rendered useless, consumer fear of the new variants could slow down the recovery. Notably, Goldman says its baseline forecasts don’t include any of these eventualities.

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