Market Risks: When Will the Last Drop Come?

Record Start in Global Markets

Global stock markets started 2026 at record levels following strong momentum in 2025. However, there are significant concerns about the sustainability of these market rises. Experts indicate that the current uptrend is being executed by "borrowing from the future." Inflated stock valuations and increasing geopolitical risks pose a risk of a radical correction in the markets.

Fragile Outlook: Expert Warnings

Despite the MSCI All Country World Index setting new records in January, professional investors warn that the outlook for the markets is becoming increasingly fragile. Experienced strategists emphasize that the high risk appetite continues, but valuations are overheating. This situation indicates a strengthened likelihood of a potential pullback.

Critical Correction Signal

The biggest concern in the markets is the lack of significant profit realization or correction movement over the past nine months. Timothy Moe, Goldman Sachs' Asia-Pacific Chief Equity Strategist, emphasized that historical data has provided a critical signal regarding the market cycle. Moe stated, "Over the last 35 years, markets have typically experienced a correction of 10% or more every 8-9 months. We have not yet experienced this process; if a geopolitical development acts as a catalyst, investors need to be prepared for a sharp pullback."

Complacency in the Markets: The "TACO" Perception

Analysts believe that the current optimism in the markets largely stems from the "TACO" (Trump Always Chickens Out) perception. Investors are characterizing geopolitical risks as "noise" by expecting that U.S. President Donald Trump's aggressive rhetoric will ultimately lead to compromise.

Signs of Fatigue: Technology Stocks

Strategists from Schwab Center and Freedom Capital Markets are drawing attention to the technical outlook of the market and sector rotation. They note that in periods of inflated valuations, potential declines may be more severe. In particular, the Nasdaq 100 Index, which is heavily weighted in technology, has failed to reach a new peak since October, signaling fatigue in the sector. Experts express that growing doubts about whether artificial intelligence spending will translate into profitability have made technology stocks the most vulnerable link in a potential correction.