Goldman Sachs says Iran conflict may trigger historic energy risks, shifts stock outlook to tactical neutral

Gelonghui, March 10｜Goldman Sachs cross-asset strategists have adjusted their stock rating to tactically neutral for the next three months and are overweight on cash, stating that the risk of a Middle East conflict triggering an energy shock comparable to the 1970s is intensifying. "The energy shock may persist, putting pressure on risk appetite and related assets, and investors are increasingly concerned that the global growth/inflation situation could significantly deteriorate," said Christian Mueller-Glissmann, Head of Asset Allocation Research at Goldman Sachs, and other strategists in a report on March 9. "Our commodities team believes that if oil flows through the Strait of Hormuz remain sluggish throughout March, oil prices are likely to surpass the peaks of 2008 and 2022." Goldman Sachs economists estimate that if oil prices reach $100 per barrel, global headline inflation could rise by 0.7 percentage points, and global economic growth could slow by 0.4 percentage points. They continue to recommend increasing resilience in multi-asset portfolios.