Goldman Sachs warns again: Regardless of how the stock market performs next week, CTA will sell S&P 500 futures.

Goldman Sachs analysts have once again warned about the US stock market, suggesting that even a slight delay in the Federal Reserve's interest rate cut next year could disrupt the continuous rise of the US stock market since the end of October. If the message delivered by Fed Chairman Powell is disappointing, then the stock market will have little room for further gains. Currently, the S&P 500 index is only 3% away from its all-time high. Both the German and French stock markets reached new historical highs this week, and the Euro Stoxx 50 index is also approaching its highest level since 2001. Both European and American stock markets appear to be highly overvalued in terms of factors such as capital flows, momentum, and technical indicators. Since the low point in late October, the US stock market has risen by a total of $4.6 trillion. Commodity Trading Advisors (CTAs) have played a significant role in driving this rally. CTAs typically trade based on market trends and have quickly shifted from bearish to bullish in the stock market. According to Goldman Sachs' estimates, this recent shift from short to long positions has increased the size of the long positions held by CTAs to $106 billion. Goldman Sachs believes that this makes CTAs more inclined to sell rather than buy stock index futures. Cullen Morgan, a derivatives and fund flow analyst at Goldman Sachs, wrote in a report to clients, "We have modeled the CTA group, and the results show that next week, regardless of how the market moves, CTAs will sell S&P 500 index futures." Morgan's estimates of the scale of CTA selling of stock index futures under different scenarios are as follows: If the stock market rises, CTAs will buy $20 billion worth of stocks but sell $1.3 billion worth of S&P 500 index futures. If the stock market falls, CTAs will need to sell $5 billion worth of stocks and $1.9 billion worth of S&P 500 index futures. If the stock market remains flat, although CTAs will need to buy $18 billion worth of global stocks, they will sell $436 million worth of S&P 500 index futures. Media analysis points out that since the S&P 500 index has just broken through the high point of this summer, other traders who rely on technical analysis may further accelerate the potential decline of the market. If the major US stock market index fails to significantly break through this level, it may be seen as the first short-term adjustment signal since the rebound began in late October. In addition, the continuous rise of the US stock market has made policymakers at the Federal Reserve feel the need to control the market, as investors have become overly optimistic about loose monetary policy. Recently, several Goldman Sachs analysts have expressed bearish views on the short-term trend of the US stock market: Cullen's colleague, Scott Rubner, Managing Director at Goldman Sachs, warned that the high level of optimism in the stock market means "there are no more bears," which is quite dangerous. Wilson-Elizondo, Deputy Chief Investment Officer of Multi-Asset Solutions at Goldman Sachs Asset Management (GSAM), pointed out that the strong non-farm employment has triggered a repricing of interest rates, coinciding with the continuous rebound of the US stock market since October. This may mean that the future rise of the stock market will be limited. However, if the US stock market falls in the future, it represents a buying opportunity, and any pullback is just an illusion. If the US stock market falls first, it will quickly reverse. Renowned economist Hartnett of Bank of America recently predicted that the market's core logic will soon shift from the "soft landing" in the fourth quarter (i.e. bad news is good news, with declining US bond yields leading to a rise in US stocks) to a "hard landing" in the first quarter (where bad news is just bad news, with declining US bond yields leading to a decline in US stocks), especially if the Federal Reserve is indeed preparing to cut interest rates as early as March.