Wall Street CEOs, including those from Capital Group, Morgan Stanley, and Goldman Sachs, predict a stock market decline of 10% or more within the next 12 to 24 months, which they view as potentially positive. Mike Gitlin highlighted that while corporate profits remain strong, stock valuations are concerning, noting that most view stocks as “between fair and full.” Ted Pick emphasized risks from U.S. policy and geopolitical factors, suggesting that a 10-15% market pullback could be healthy and reflective of normal market dynamics.
Despite a high P/E ratio for indices like the S&P 500 and Nasdaq, there are still risks associated with expensive market valuations. CEOs expressed that while technology stocks are strong, this does not reflect the broader market. Ken Griffin remarked that markets tend to be irrational at extremes, and Solomon advised clients to remain invested without trying to time the market. These pullbacks are seen as opportunities to reevaluate rather than signals of a fundamental market shift.
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