Goldman Sachs President: Market Ready for Further Downside, Nvidia Earnings Key

Goldman Sachs' Outlook on the Market and the Significance of Nvidia's Earnings

David Waldron, President of Goldman Sachs, stated that the market is already prepared for a potential further downturn, and investors are closely watching the upcoming key financial report of technology giant Nvidia.

In an interview during the Bloomberg New Economy Forum in Singapore, Waldron explained, "In my view, it's entirely possible that the market will see a slight correction from its current levels. It does seem that the prevailing technical trend is towards increasing protection and hedging against downside risks."

The S&P 500 has fallen by more than 3% so far this month and is heading towards its worst performance since March, with market volatility soaring. The massive sell-off of shares in the world's largest technology companies has sparked a new debate about artificial intelligence: are current revenues and profits sufficient to justify the huge investments in related infrastructure?

Waldron added: "What we're seeing now is a wave of correction in the market, and I think this is healthy, given the significant gains the market has made this year. The market is currently heavily focused on the AI wave: will we get returns commensurate with the capital invested? Are these expectations fully factored into prices? This is the crux of the ongoing debate."

He pointed out that Nvidia's earnings report, which will be released later, "will be a very important moment for the market."

Another Perspective from Bob Diamond

Earlier, Bob Diamond, who also attended the forum, stated that the recent turmoil in global markets appears to be a "healthy adjustment," as investors consider how to assess the various elements of technological change.

Diamond, former CEO of Barclays Group and head of investment firm Atlas Merchant Capital, said: "We have seen a repricing of risk assets. In my opinion, this is a healthy adjustment, not the start of a bear market."

Diamond also expressed concern about the increasing size of sovereign debt, driven by fiscal spending, describing it as "a cloud looming over the markets."

The Cboe Volatility Index, known as the "fear gauge" on Wall Street, rose above the 24 level, higher than the critical level of 20 that worries traders, and reached its highest level in a month.

The Long-Term Impact of Artificial Intelligence

Diamond emphasized the need to look at the long-term impact of artificial intelligence, saying: "We should look at the impact of AI over two years, three years, or even five years. I think AI will be a very positive force in curbing inflation. It will also be very important in boosting the productivity of the global economy. I think some people may be confused about valuations right now."

He expressed strong optimism about the impact of artificial intelligence on productivity, curbing inflation, and global growth. He pointed out that the market has not yet fully grasped some of the numbers, especially those related to data centers.

Waldron expects any future declines in US stocks to be relatively limited. He said: "I don't think we will see significant declines from current levels."