CEOs from major Wall Street firms have warned that global
equity markets could see a decline of more than 10% within the next one to two
years. They described the potential correction as part of a normal market cycle
rather than a sign of crisis.
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IG, CMC, and Robinhood in London’s leading trading industry event!
A sharp equity market decline could influence retail
traders’ behavior, with some likely to cut exposure or move to safer assets.
Others may view the lower valuations as buying opportunities, potentially
increasing short-term volatility and trading activity.
Equity Correction Could Be Healthy Development
According to Bloomberg report, at a financial summit
organized by the Hong Kong Monetary Authority, Capital Group CEO Mike Gitlin
said valuations were becoming a concern despite solid corporate earnings. “Most
people would say we’re somewhere between fair and full,” he noted, suggesting
that few see markets as cheap. He added that credit spreads are also tight.
Gitlin’s concerns were echoed by Morgan Stanley CEO Ted Pick
and Goldman Sachs CEO David Solomon. Both agreed that markets may face a
significant pullback after years of gains. Pick said markets have advanced
considerably but still face “policy error risk” in the US and geopolitical
uncertainty. He added that a 10% to 15% correction would be “a healthy
development” rather than a sign of weakness.
Bloomberg says Wall Street CEOs are warning of a possible 10–15% equity correction in the next 12–24 months, saying valuations are “full, not cheap.”
Capital Group CEO Mike Gitlin said corporate earnings remain strong but “what’s challenging are valuations,” noting the S&P 500… pic.twitter.com/PYGg23C0aZ— Wall St Engine (@wallstengine) November 4, 2025
10–15% Drawdowns Seen as Normal
The S&P 500 index currently trades at 23 times forward
earnings, above its five-year average of 20 times. The Nasdaq 100 index is
valued at 28 times earnings, compared with about 19 times in 2022. Futures on
the Nasdaq fell nearly 1.8% on Tuesday, with Palantir Technologies dropping
more than 7% in pre-market trading amid concerns over high valuations.
Citadel CEO Ken Griffin described the current market as
being “very deep into a bull market,” warning that investor sentiment can
become most irrational at extreme highs and lows.
Solomon said that while technology stocks appear expensive,
other parts of the market remain fairly valued. He added that drawdowns of 10%
to 15% often occur even in positive cycles, allowing investors to reassess
portfolios. “It just means things run and then they pull back so people can
reassess,” he said.
CEOs from major Wall Street firms have warned that global
equity markets could see a decline of more than 10% within the next one to two
years. They described the potential correction as part of a normal market cycle
rather than a sign of crisis.
Join
IG, CMC, and Robinhood in London’s leading trading industry event!
A sharp equity market decline could influence retail
traders’ behavior, with some likely to cut exposure or move to safer assets.
Others may view the lower valuations as buying opportunities, potentially
increasing short-term volatility and trading activity.
Equity Correction Could Be Healthy Development
According to Bloomberg report, at a financial summit
organized by the Hong Kong Monetary Authority, Capital Group CEO Mike Gitlin
said valuations were becoming a concern despite solid corporate earnings. “Most
people would say we’re somewhere between fair and full,” he noted, suggesting
that few see markets as cheap. He added that credit spreads are also tight.
Gitlin’s concerns were echoed by Morgan Stanley CEO Ted Pick
and Goldman Sachs CEO David Solomon. Both agreed that markets may face a
significant pullback after years of gains. Pick said markets have advanced
considerably but still face “policy error risk” in the US and geopolitical
uncertainty. He added that a 10% to 15% correction would be “a healthy
development” rather than a sign of weakness.
Bloomberg says Wall Street CEOs are warning of a possible 10–15% equity correction in the next 12–24 months, saying valuations are “full, not cheap.”
Capital Group CEO Mike Gitlin said corporate earnings remain strong but “what’s challenging are valuations,” noting the S&P 500… pic.twitter.com/PYGg23C0aZ— Wall St Engine (@wallstengine) November 4, 2025
10–15% Drawdowns Seen as Normal
The S&P 500 index currently trades at 23 times forward
earnings, above its five-year average of 20 times. The Nasdaq 100 index is
valued at 28 times earnings, compared with about 19 times in 2022. Futures on
the Nasdaq fell nearly 1.8% on Tuesday, with Palantir Technologies dropping
more than 7% in pre-market trading amid concerns over high valuations.
Citadel CEO Ken Griffin described the current market as
being “very deep into a bull market,” warning that investor sentiment can
become most irrational at extreme highs and lows.
Solomon said that while technology stocks appear expensive,
other parts of the market remain fairly valued. He added that drawdowns of 10%
to 15% often occur even in positive cycles, allowing investors to reassess
portfolios. “It just means things run and then they pull back so people can
reassess,” he said.
This post is originally published on FINANCEMAGNATES.
