1. Goldman traders warn against shorting stocks amid upside risk.

Investors are justifiably wary as they track conflicting headlines on the Iran war, but the latest bout of selling has at least created a cleaner risk-reward picture.
The team notes that barring any major shock on the macro front, selling pressure looks almost over and symmetry now lies to the upside.
“So while the current dislocation doesn’t guarantee a reversal, it does make the current setup look more interesting, for the braves,” they say.

2. The correction in the S&P 500 is nearing its final stages, says Morgan Stanley.

"The S&P's forward P/E ratio has now compressed by 17%, which is in the range of prior growth scare outcomes in the absence of a recession or the Fed hiking," notes Morgan Stanley.
With over 50% of Russell 3000 companies down at least 20% from 52-week highs, the brokerage points out that "damage under the surface has been significant already."

“After six months of consolidation, the current valuations appear very attractive”. Morgan Stanley maintained a year-end target of 7,800 for the S&P 500, provided the economy successfully avoids a recession.

Below: MSFT is extremely oversold and ready for a 10-15% bounce.

3. Japan's Nikkei wipes out 2026 gains as war drives recession worries.

"The market is probably now wary not only of inflation and an economic slowdown (from the Middle East situation), but even of a recession. In other words, negative growth — not just a simple slowdown," said Shingo Ide, chief equity strategist at NLI Research Institute.

4. “Equities are bearishly overshooting the natural gas move, relative to 2022’s experience”, says JPMorgan.

As an example, in 2022 SX5E fell 20% as gas prices spiked from 70 to 300, 4x+. This time around, SX5E has already seen a 11% fall, more than half of the 2022 episode, but gas price has so far moved only 1x, from 30 to 60.
In other words, SX5E moves relative to moves in gas prices are materially more bearish this time.
Also, in complete contrast to 2022, it is hard to see wages-prices stagflationary spiral taking hold when many indicators of labour market sentiment are quite soft.

5. Luxury stocks are a “buy” despite the Iran war, says UBS.

"We have yet to see any evidence of a demand slowdown, especially in Asia," UBS wrote in a research note. "Against a backdrop of very negative market sentiment and depressed valuations, we think that even modest first-quarter beats could be disproportionately rewarded."
UBS highlighted fashion, champagne, and cognac giant LVMH and watch and jewelry maker Compagnie Financiere Richemont as UBS's two top picks in the luxury sector.
The Swiss bank's price targets imply 40% upside for LVMH and 32% upside for Richemont, as of Friday's closing prices.
Ray-Ban owner EssilorLuxottica and fashion brands Brunello Cucinelli, Burberry, and Ermenegildo Zegna are the other luxury stocks that UBS rates at Buy.

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