Recent pullbacks in risk assets are an opportunity to buy, not the beginning of a long-term bear market

On March 5, according to Wall Street Insights, amid global market turbulence, Goldman Sachs took an contrarian bullish stance, believing that the recent market correction is an opportunity to buy rather than the start of a long-term bear market. This optimism is based on the institution's positive outlook on the "recovery" of circulation around the Strait of Hormuz.

Led by Peter Oppenheimer, Goldman Sachs' strategy team wrote in a report on Wednesday that although risk assets are facing "significant resistance" from concerns over the Middle East war and disruptive impacts of AI, the resilience of economic fundamentals and strong corporate earnings growth suggest that the depth and duration of this correction will be limited.

Goldman Sachs' optimism about the global markets largely rests on expectations that the energy supply chain will recover quickly. Goldman Sachs' chief oil strategist Daan Struyven predicts that the blocked oil transportation through the Strait of Hormuz will remain at its current very low level over the next 5 days, then recover to 70% of normal capacity within two weeks, and achieve full normalization at 100% in four weeks.