Short Squeeze Impedes Quality Stocks Despite Calm Macroeconomic Picture

Goldman Sachs strategists led by David Kostin view the recent recovery of quality stocks as merely a flash in the pan. While the "Quality" factor – meaning stocks with high return on equity, solid balance sheets, and stable earnings – rose by about 4% last week, this increase follows a massive drop of 17% since July, one of the strongest corrections since the pandemic. The main reason, according to Goldman, is a significant short squeeze movement that has primarily driven up the weaker segments of the market. Macroeconomic environment speaks...