Goldman says market correction risk is rising, but a bear market is unlikely

Traders on the floor of the New York Stock Exchange.
Source: New York Stock Exchange

The major averages have clawed back their coronavirus-induced losses and hit record highs in January, but Goldman Sachs believes a pullback may be coming.

"In our view, there is a risk of a correction," the firm said Tuesday in a note to clients. "Our risk appetite indicator, designed to highlight changes in market sentiment and vulnerabilities to tactical corrections, is at elevated levels suggesting a correction is increasingly likely."

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