Wall Street CEOs Warn of Stock Market Decline

Expectations of Market Decline

Leading CEOs on Wall Street have warned of a potential pullback in the markets due to high valuations. Mike Gitlin, President and CEO of Capital Group, stated at a finance summit organized by the Hong Kong Monetary Authority, "Company balance sheets are strong, but the valuations are challenging."

Similar Views from CEOs

Ted Pick, CEO of Morgan Stanley, noted that there has been significant growth in the markets while also emphasizing the 'policy error risk' in the U.S. and geopolitical uncertainties. Pick said, "Yes, the markets look expensive. However, systematic risk has likely decreased."

Emphasis on Healthy Declines

Pick mentioned that there will be a greater focus on company earnings in the upcoming period, stating, "Stronger companies will perform better while weaker ones will lag behind." He also indicated that declines of 10% to 15%, regardless of the macro gap effect, could be a healthy development.

Investment Advice from Goldman Sachs

David Solomon, CEO of Goldman Sachs, advised clients to actually continue their investments and reassess their portfolio allocations. Solomon remarked that declines of 10% to 15% in the stock market occurred without changing the overall direction of capital flows and that this is a natural pullback.