Parts of the market are in a bubble, but they pose low risk to the S&P 500, Goldman says

Parts of the market are in a bubble, but they pose low risk to the S&P 500, Goldman says

People walk by the New York Stock Exchange (NYSE) in lower Manhattan on October 02, 2020 in New York City.Spencer Platt | Getty ImagesParts of the market are in bubbles, but they are unlikely to take the overall market down with them when they pop, according to Goldman Sachs.The Wall Street firm said exuberance around special purpose acquisition companies, as well as around investor interest in companies with negative earnings are cause for concern; however, these speculative areas don't pose a risk to the overall level of the S&P 500."Pockets of the market have recently demonstrated investor behavior consistent with bubble-like sentiment,"  David Kostin, Goldman Sachs' chief U.S. equity strategist, told clients. "But these excesses present low systemic risk to the broader market given their modest share of market cap."Fifty-six SPAC initial public offerings have been completed so far in 2021, raising $16 billion, Goldman notes. This adds to the 229 U.S. SPACs that raised $76 billion in 2020, which was dubbed the "years of the SPAC," said Goldman."Low interest rates, the flexible structure, and the two-year window to find a target before returning capital suggest the popularity of SPACs will continue in the near term. Importantly, we see little risk to public