Global Market Rally Shows Signs of Fatigue Amid Geopolitical Uncertainty
The MSCI All Country World Index surged 20.6% in 2025, reaching a new high on January 15, yet veteran strategists warn of an overdue correction. Timothy Moe, Goldman Sachs' chief Asia-Pacific equity strategist, notes that markets historically see a 10% pullback every eight to nine months—a pattern absent in the current nine-month rally. "If geopolitical risks materialize, investors should brace for volatility," he cautioned.
Political turbulence, including Trump's tariff reversals and the Greenland standoff, has failed to dent market optimism. The so-called 'TACO' trade—'Trump Always Chickens Out'—reflects trader confidence that threats will dissipate. But Miroslav Aradski of BCA Research contends complacency may be misplaced as tensions simmer beneath the surface.
