The outlook for the US stock market is in doubt! Goldman Sachs: Clients are seeking to exit the US market

According to the Zhitong Finance APP, executives from Goldman Sachs Asset Management have warned that the bank's clients are increasingly demanding to withdraw funds from the U.S. market. Matt Gibson, head of client solutions at Goldman Sachs Asset Management, stated, "The U.S. is no longer viewed as a safe and dominant market as it was six months ago." This executive pointed out that clients are increasingly asking whether the rally in the U.S. stock market has "come to an end" and whether they should shift their focus to European and Chinese stock markets.

When asked if clients have taken actual steps to withdraw from the U.S. market, Matt Gibson said, "Everyone is considering this matter." However, he emphasized that none of the people he knows have completely exited their investments in the U.S. for now.

According to a fund manager survey released by Quilter, more than half (53%) of stock pickers believe that the U.S. stock market will be the worst-performing market among all major markets by 2025.

Although U.S. stocks have largely recovered from the decline after "Liberation Day," several Goldman Sachs executives pointed out that the real turning point for the market will come when the negative impacts of tariffs appear in hard data, particularly with rising unemployment rates.

Alexandra Wilson-Elizondo, co-head of global multi-asset solutions at Goldman Sachs, stated, "Retail investors now account for one of the highest proportions we have seen in recent history." "Once the employment situation changes, this situation will face risks. Because typically, retail investment behavior is closely related to their confidence in their jobs and the economy."

Another factor limiting the performance of the U.S. market is the bond market. Since Trump initiated the global trade war, the yield on U.S. 30-year Treasury bonds has hovered around 5%, while before "Liberation Day," the yield was less than 4.5%. Alexandra Wilson-Elizondo noted, "Bond prices and yields limit the room for further stock price increases. The psychological threshold of 5% is very important because I believe it will restrict the future performance space of the stock market."

Meanwhile, Hania Schmidt, head of quantitative investment strategies for Goldman Sachs EMEA (Europe, Middle East, and Africa), stated, "We are indeed seeing investors broadening their portfolios and focusing on overlooked investment themes." This means that clients are shifting from large-cap stocks to small-cap stocks and reallocating investments out of the U.S. market.

Hania Schmidt pointed out that investor interest in markets outside the U.S. is also rising. The largest companies by market capitalization in the U.S. are almost all "mega-cap tech stocks," while the top companies in the UK and Europe are more industry-diverse, driven by different macro themes and possessing different business models.

Hania Schmidt also mentioned that due to lower market efficiency, Goldman Sachs' investment analysts believe there are more opportunities for significant returns in the European and UK markets. Hania Schmidt noted, "Information spreads more slowly in the European market compared to the U.S. market. From the perspective of analyst coverage, the coverage is lower, and the efficiency of information dissemination is poorer."