Jan 7, 2021 - Economy

Exclusive: Goldman CEO says "I'd be cautious" of stock market

David Solomon

Photo: Michael Kovac/Getty Images

Goldman Sachs CEO David Solomon is preparing for more stock market volatility, particularly in the near term, and currently sees some "excess in markets," he told Axios in a phone call this week.

Why it matters: Solomon is the latest in a long list of high-profile CEOs, fund managers and investment strategists to warn that stock prices may be running away from reality.

What he's saying: "The markets have been quite ebullient as of late. You know, I think there's some excess in markets."

  • "I think there's a lot of retail participation in markets that's certainly making markets a little bit more ebullient. I'd be cautious about some of that."

Driving the news: U.S. equity indexes bounced back strongly from Monday's selloff and are again trading near all-time highs, despite coronavirus cases and deaths in the U.S. and around the world rising to new record highs.

By the numbers: Analysts at Bank of America Research noted Tuesday that S&P 500 earnings are estimated to have fallen by 15% but the index finished 2020 up 18.4% and set 33 record highs during the year.

  • Stocks have risen 56% in two years.

The big picture: "I do think the recovery just won't be a straight line, and you know, I think the markets are pricing in, you know, just everything working perfectly as we come out of this, and I'm sure there'll be bumps along the way."

Go deeper