``` Wall Street sentiment has reached extreme fear! Goldman Sachs expert: Even if Trump hints at a ceasefire, I still feel uneasy about "going long" ```

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The conflict has lasted five weeks, and market sentiment has fallen into the extreme fear zone, but reversal signals are beginning to emerge. Rich Privorotsky, head of Goldman Sachs Delta-One business, pointed out that there is a "step-down" path for the situation. Market sentiment, positioning structure, and holiday effects together constitute a short-term asymmetric upward risk, though he himself remains uneasy about holding long positions.

According to the Wall Street Journal, Trump has told his aides that even if the Strait of Hormuz remains largely blocked, he is willing to end U.S. military operations against Iran.

Trump later claimed in public that Iran is "basically beaten," and called out to global oil buyers: "The hardest part is done, go find oil yourselves!" Meanwhile, U.S. Trade Representative Jamieson Greer said, when asked about the Strait of Hormuz passage issue, that "the U.S. is unaffected by supply chain problems."

However, even as ceasefire signals were released, the situation escalated noticeably overnight—Iran attacked a heavily loaded oil tanker docked in Dubai, seen as a clear assertion of control over shipping.

Privorotsky believes this move may be a retaliatory response to U.S. strikes on Isfahan nuclear facilities. CNN's Fear & Greed Index has fallen to 9; the market is undergoing massive deleveraging, with both sentiment and position data pointing to extreme pessimism.

Ceasefire Path: Political Costs Are Controllable But Full of Uncertainties

Privorotsky believes a "step-down" scenario is possible; the most optimistic short-term scenario is a "mission accomplished" declaration—substantially reducing nuclear capabilities (set back by about 10 to 20 years), giving the U.S. an excuse to withdraw.

He also pointed out that if the U.S. pauses action while Iran maintains some degree of blockade, the pressure dynamic will shift. Asian, European, and Gulf Cooperation Council (GCC) countries will face direct pressures, prompting motivation to restore shipping.

He added that even unilateral restrictions on U.S. and Israeli ships are still controllable to some extent; unilateral victory could actually reopen the strait and shift pressures to other countries.

However, he admits he currently has "no clear judgment advantage" as the path is politically complicated, especially for GCC, and that long-term effects are highly disputed.

Rising Recession Expectations, Defensive Asset Logic Strengthened

On the macro level, Polymarket data shows the probability of economic recession by 2026 has risen to 36%, and both interest rates and gold are trading defensively. Privorotsky pointed out that the MOVE Index fell another 3 points yesterday, but this trend reflects more of downgraded growth expectations than pure risk aversion.

He believes arguments for policy overtightening are becoming increasingly convincing, while growth is likely to continue weakening. Together, they form a favorable backdrop for defensive assets.

Structurally, he sees defensive sector performance logic as closer to inflation-protected bonds (TIPS) rather than regular bonds, with current real interest rates obviously high relative to fiscal direction, the final result likely being lower real rates.

Under this logic, he favors allocations to healthcare and utilities, and selectively increases cyclical exposure in areas with genuine long-term growth logic.

AI & Chips: Valuation Repricing Pressure Continues

Privorotsky takes a clearly cautious view on AI. He believes that the "day of reckoning" has arrived for memory chips—intensive capital expenditure, lagging supply response, and uncertain demand are together putting downward pressure. The entire AI industry chain, both software and hardware, faces valuation multiple compression.

Using Nvidia as an example, he says the company is in a technical bear market, with its forward P/E ratio now below ExxonMobil, indicating lost confidence in its terminal value.

He emphasizes the core issue is not recent earnings but pricing power and business sustainability: today's technology may become obsolete faster than expected, and the market is only willing to pay for short-term visibility.

As for expensive software stocks, he expresses greater short confidence, reasoning that intensifying competition and pricing erosion will keep dragging growth; and such asset-light business models have almost no room for value recovery, with highly uncertain terminal value.

Sentiment Hits Bottom, But Longs Still Need Patience

Despite maintaining a cautiously optimistic stance overall, Privorotsky emphasizes he "remains uneasy" about holding long positions, and does not expect a straight upward rally—continued valuation compression in the AI sector and lingering private credit worries are constraints.

From positioning and sentiment indicators, he describes the current environment as: extremely weak market sentiment, net positions extremely low, commodity trading advisors (CTAs) heavily short, CNN Fear & Greed Index down to 9 (he will closely watch for a zero value); large-scale deleveraging began last Friday and continued yesterday.

He believes that with Easter and Passover holidays approaching, risk-reward is asymmetrically upward. The market's immunity to "White House verbal intervention" is strengthening, but he argues this ignores its underlying mechanism—"the White House will iterate until it gets the desired result; the more the market falls, the closer to resolution."

In asset allocation, he favors TIPS, healthcare, utilities, some telecoms, gold, as well as adjusted European industrial stocks (steel, cement) and aerospace. The core logic is to focus on "moats"—seeking out companies that can't be easily replaced.

Risk Warning and DisclaimerThe market carries risks, and investment should be done cautiously. This article does not constitute personal investment advice and does not take into account any individual user's specific investment goals, financial situation, or needs. Users should consider whether any opinions, views, or conclusions in this article are suitable for their particular circumstances. Investing based on this is at your own risk. ```