Goldman Sachs says Iran conflict could pose historic energy risk, neutral on stocks turning tactical.

Goldman Sachs' cross-asset strategists have adjusted their stock rating to tactical neutral for the next three months and have overweighted cash, stating that the risk of a Middle East conflict exacerbating a crisis akin to the 1970s energy shock is increasing. "The energy shock may persist, putting pressure on risk appetite and related assets, as investors are increasingly worried that global growth/inflation conditions could significantly deteriorate," said Goldman Sachs' asset allocation research director Christian Mueller-Glissmann and other strategists in a report on March 9. "Our commodities team believes that if oil flow through the Strait of Hormuz remains depressed throughout March, oil prices could surpass peak levels seen in 2008 and 2022." Goldman economists estimate that if oil prices reach $100 per barrel, global overall inflation could rise by 0.7 percentage points, global economic growth could slow by 0.4 percentage points, and they continue to recommend increasing resilience in diversified asset portfolios.