Goldman Sachs and Morgan Stanley Warn of Potential Market Correction Amid Global Rally
Wall Street giants Goldman Sachs and Morgan Stanley anticipate a 10-20% market pullback within the next two years, even as global equities continue their record-breaking ascent. The warning comes amid unprecedented rallies across major indices, fueled by AI Optimism and anticipated rate cuts.
"Markets run, then they pull back for reassessment," Goldman CEO David Solomon observed at Hong Kong's Global Financial Leaders' Investment Summit. The Nikkei 225, Kospi, and Shanghai Composite have all hit historic highs, with Chinese equities benefiting from thawing US relations and dollar weakness.
Institutional investors remain unfazed by the projected correction. Solomon emphasized that such drawdowns occur regularly even during bull markets, advising clients to maintain strategic allocations rather than attempt market timing.