Goldman Model Predicts Trouble As Grains Get Hit
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Jason Goepfert
Published: 2018-09-06 at 09:05:39 CDT
This is an abridged version of our Daily Report.
Model trouble
A Goldman Sachs model incorporating five fundamental factors shows a high risk of an imminent bear market in stocks.
When the model reaches its current level, the average S&P 500 return over the next six months was negative 6%.
No gains for grains
Combined sentiment toward corn and soybeans has been among the lowest since 1991.
When a 5-day average of the Optimism Index for both contracts was this low, forward returns in the DBIQ Diversified Agriculture Index were decent, especially shorter-term, and soybeans tended to do better than corn.
Defensive
Utilities were the best-performing sector on Wednesday with more than a 1% gain. Tech was the biggest loser, with more than a 1% loss. Since the inception of XLU and XLK, this has happened 64 times, and it was mildly negative for stocks in the short-term.
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The post titled Goldman Model Predicts Trouble As Grains Get Hit was originally published as on SentimenTrader.com on 2018-09-06.
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