Goldman Trader Says Buoyant Stocks Are Ignoring Recession Risks

A 30% probability of a US recession might sound like a red flag, yet global stocks remain buoyant as betting against the market momentum “feels almost irrational,” according to a macro trader at Goldman Sachs Group Inc.

“The key point is that the market can’t look far enough. This is why it will ignore the recession risk,” Paolo Schiavone wrote in a note to clients.

Investors are likely to disregard a possible labor market slowdown, instead focusing on strong liquidity as well as structural growth themes such as artificial intelligence and fiscal credit expansion, he said.

US stocks are near ...