Although the risk of a stock market correction is rising, strategists at Goldman Sachs say that stimulus measures and the “event-driven nature of the economic crisis make a bear market unlikely.” This according to a recent article in Bloomberg.

The strategists, led by Peter Oppenheimer, wrote in January that the market is in the early stages of a bull phase following an “explosive” valuations-led rebound in equities: “The market is rising on good news but choosing to largely ignore weaker data and rising infection rates.” They added, “There is a risk of a correction, but without a bear market inflection.”

Goldman noted that the market’s sharp rebound since the pandemic began last year is “almost identical” to the recovery from the financial crisis in 2009. The team explained that the financial crisis triggered a “structural bear market” while the coronavirus-led recession was event-driven, and that the speed and scale of policy support “have reduced the risks of structural scarring and tail risks for investors, allowing them to ‘look through’ the downturn into recovery.”