War, Inflation Force Wall Street to Ditch Age-Old Strategies
- U.S. dollar, tech stocks and commodity currencies in favor
- Goldman backs currency hedges for stagflation, recession risks
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As the war in Ukraine enters its second month, Wall Street is considering an array of possible outcomes, from de-escalation to protracted conflict. Goldman Sachs Group Inc. is recommending cheap hedges against stagflation in one scenario. BlackRock favors short-dated bonds in another. French titan Amundi SA is warning of tighter liquidity.
Investors who’d taken to the sidelines at the time of the Russian invasion are under increasing pressure to hedge their risks. Many investment specialists say they’re ditching high-conviction strategies that bet on market direction.