Goldman Sachs Says Market Now Too Relaxed on Ukraine Risk

• Pricing makes assets vulnerable to deterioration, Goldman says
• Stoxx 600 has almost erased losses since Russia’s invasion

Global markets may be getting too relaxed about downside risks related to war in Ukraine, strategists at Goldman Sachs Group Inc. said, warning that current prices no longer reflect more negative scenarios.

The recent outperformance of European assets and a reversal of sharp gains for oil prices “points to a significant relaxation in the market’s assessment of the global implications” of the invasion, strategists Dominic Wilson and Vickie Chang wrote in a note. Assets are now “more vulnerable if progress toward a resolution proves fleeting or if energy supplies are disrupted more severely.”

Europe’s benchmark Stoxx Europe 600 index is close to erasing all of the losses sustained since Russia’s invasion of Ukraine on Feb. 24, while the S&P 500 is now trading higher than where it closed on the eve of the attack.

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