US households are pivoting away from stocks as the Federal Reserve continues to hike interest rates, and the shift could result in a $750 billion sell-off in equities this year, according to Goldman Sachs strategists.
"The rise in yields since the start of 2022 along with the recent acceleration of flows into bond and money market funds has led many investors to ask what the magnitude of household equity selling will be in 2023," the investment bank said in a note, led by Cormac Conners. Households are allocating more to money-market assets and credit, according to the note. The rise in borrowing costs has hit company valuations and also left traders feeling less inclined to bet on high-growth names.
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