In March of 2015, we said that Goldman's clients were most worried about the then-relentless crash in the EUR and how the resulting strong USD would hit US earnings (which, in retrospect, is ironic now that the tables have fully turned). Then In November 2015 we reported that "Goldman's Clients Are Suddenly Very Worried About Collapsing Market Breadth" (and with good reason, the market was about to crash precisely for that reason). Several months later, Goldman's clients were again confused - and worried - this time demanding that all their questions be answered before BTFD.

Then, in July 2016, Goldman's clients again had a burning question: they were struggling to reconcile how extreme valuations of both equities and bonds can co-exist. As David Kostin explained one year ago, "client discussions reveal low portfolio risk coupled with concern that the rally lasts. Most investors have  been skeptical of the valuation expansion and have not participated in the 8% rebound from the post-Brexit low on June 27. Upside call buying has been a popular strategy to insure against upside risk." Additionally, Goldman clients were very worried that this remains a market without any earnings growth, and that much of the S&P upside has been due multiple expansion: "the S&P 500 forward P/E has already expanded by 70% during the past five years, exceeding all other expansion cycles except 1984-1987 (up 111%) and 1994-1999 (up 115%). Both prior extreme P/E multiple expansion cycles ended poorly for equity investors."