Goldman Sachs trader: Be wary of economic data cracks and stop the rise of US stocks

Investors need to be vigilant over the next 12 months about identifying economic data that could pose a threat to a record stock market rally, according to a macro trader at Goldman Sachs. Paul Schiavone of Goldman Sachs pointed out that labour market data would play a key role in warning of cracks in the economy. He cited data from the New York Fed as an example that while the probability of losing a job remains low, the probability of a worker finding a new job once unemployed is only 45 per cent, the lowest valuation ever recorded. The S & P 500 index hit another all-time high on Wednesday. However, the US labour market, fiscal spending and the potential for over-optimism about artificial intelligence have triggered caution among some senior market participants. Mr. Schiavone has previously said the market has underpriced recession risk. "I wouldn't short a bubble too early, but I wouldn't ignore a crack either," he wrote.