Goldman Sachs: No capitulation-style sell-off in the stock market; recommends simplifying the portfolio and increasing cash holdings

K-LinePoet · 2026-03-31T12:34:51+00:00

Goldman Sachs Hedge Fund Business Global Head Tony Pasquariello pointed out that despite reducing exposure and large-scale selling of index futures, the stock market has not experienced a severe sell-off. He is concerned that market participants are underestimating the risks posed by the surge in oil prices and recommends simplifying the investment portfolio and moderately increasing cash holdings.

K-LinePoet

2026-03-31 12:34:51

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Goldman Sachs partner and global head of the hedge fund business, Tony Pasquariello, said that despite hedge funds reducing exposure and asset managers and systematic traders also heavily selling index futures, stock market positioning has not yet seen a “true capitulation-style” selloff. “To be blunt: the market is obviously smarter than I am, but I’m surprised that market participants haven’t shown greater concern,” Pasquariello wrote in a report. He noted that historical experience shows that during phases when oil prices surge, the stock market should have seen a larger drop; in past similar situations, the average decline in the stock market was 12%. This has Pasquariello worried that investors are “underestimating the potential tail downside risk.” However, he added that the bulls may be betting on the durability of U.S. economic growth; to truly disrupt the current investment narrative, it may take more than just a surge in oil prices. Pasquariello wrote: “Even if the bigger trend remains favorable, I think it’s reasonable to simplify portfolios and modestly increase cash levels.”

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