If you feel like we are in for a stock market correction, you're not alone. In a research note, U.S. investment bank Goldman Sachs said that its Bear Market Risk Indicator had hit 67 percent, the highest level since 2008, a matter of months before the financial crisis. However, there is one difference. Goldman Sachs disagrees. Yes, that's right, the people who built the model disagree with it. "Since the GFC, fears of secondary bear markets have never been far away," Goldman Sachs wrote.

"The indicator, currently at 67%, points to a high risk of a bear market in the next 24 months (88% based on historical relationships), but we see reasons to be less worried."

The Indicator is based on five factors; valuation, ISM (growth momentum), unemployment, inflation and the yield curve, all of which are at the forefront of current discussion.

Valuation continues to be a point of contention. As the stock market continues to reach record highs, valuation metrics are getting dragged higher by the day. Both the forward 12-months price to earnings (P/E) and earnings per share (EPS) ratios remain near record highs, well above their respective 5 and 10-year averages. Of the five indicators, Goldman Sachs ranks valuation as the "most-stretched."

Secondly, U.S. ISM numbers have stalled of late. July's Non-Manufacturing reading of 53.9 was the lowest level since August 2016, and despite a rebound in August of this year to 55.3, it remains below the average of the last 12-months. The slowing numbers suggest sentiment is waning at the business level as legislation from the new government has underwhelmed. After a slew of pro-business promises from President Donald Trump, no substantial legislation has made its way through the House and Senate.

Elsewhere, record low levels of unemployment are raising concerns that the strong job market is doing more harm than good, benign inflation remains a concern for policy officials, and the yield curve continues to flatten, heading towards pre-Great Recession levels.

So why does Goldman Sachs see little concern? The benign inflation that has policy officials on watch has staved off any short-term economic downturn. The lack of any inflation has kept interest rates suppressed, which has boosted borrowing and investment. Additionally, it has pushed equities to record highs as yields remain less attractive. Compare this to the period from 2005-2007 leading up to the Great Recession. The Federal Reserve continued to lift interest rates as inflation began accelerating; eventually shooting above 5 percent in early 2008, just before the beginning of the economic collapse.

Take Away

Don't let your eyes deceive you. While Goldman Sachs Bear Market Indicator continues to climb, economists say that the current accommodative monetary policy environment will protect equity markets heading into bear territory. However, they do expect a period of weaker than usual profits. "In our view, an extended period of low returns is more likely than an imminent bear market," Goldman Sachs wrote.

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