Morgan Stanley, Goldman Sachs warn investors of market correction

Global markets may face a reality check after a strong rally this year, as Goldman Sachs and Morgan Stanley warned of a possible 10%-20% correction over the next two years. 

Equities have surged to record highs, fueled by AI optimism and rate-cut expectations. 

Goldman CEO David Solomon said pullbacks are natural in long bull runs, urging investors to stay invested rather than time the market.

Morgan Stanley CEO Ted Pick called such declines healthy and not signs of crisis.

Both banks remain optimistic about Asia, highlighting opportunities in China, Japan, Hong Kong, and India, driven by trade pacts, corporate reforms, and infrastructure growth.

The IMF and central bankers recently echoed concerns over inflated valuations.