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Goldman’s Waldron Sees More Market Pullback, Subprime Loan Risk.

stock :: 2025-11-20 :: source - bloomberg

By Adam Haigh and Francine Lacqua

(Bloomberg) -- Goldman Sachs Group Inc. President John Waldron said markets are primed for possible further declines and investors will be keeping close tabs on the upcoming key earnings report from technology leader Nvidia Corp.

“It strikes me the market could pull back further from here,” Waldron said in an interview on the sidelines of the Bloomberg New Economy Forum in Singapore on Wednesday. “I do think the technicals are kind of more biased for more protection, and more downside.”

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The S&P 500 is down more than 3% this month, on course for its worst month since March, while volatility has surged. A selloff in the world’s largest technology companies has reignited a debate on AI, and whether it is generating enough revenue or profit to justify the massive spending on infrastructure.

Goldman Sachs Group President John Waldron says markets are primed for possible further declines, in an interview on the sidelines of the New Economy Forum 2025.Source: Bloomberg

“You’re seeing in the markets right now a pullback, which I think is healthy — markets have run quite a bit this year,” he said on Bloomberg Television. “Markets are heavily focused on this AI dynamic: are we going to get the returns on capital invested that the market expects, and is that priced in? That’s a big debate.”

Nvidia’s earnings later Wednesday “will be a very important moment for the markets,” he added.

Earlier, Bob Diamond, who’s also attending the forum, said turmoil in global markets in recent days resembles a “healthy correction” as investors grapple with how to assess elements of technological change.

“We’ve seen risk assets be repriced,” said Diamond, the former chief executive officer of Barclays Plc who now runs investment firm Atlas Merchant Capital. “In my sense, this is a healthy correction, not something that’s turning into a bear market.”

Diamond also said fiscal spending that’s led to elevated sovereign debt piles “is a dark cloud” hanging over markets.

Wall Street’s so-called fear gauge, the Cboe Volatility Index, topped 24 — above the key 20 level that causes concern for traders — and reached its highest in a month.

“What I feel comfortable in is taking a two, three, five-year view of the impact of AI,” Diamond said in an interview on Bloomberg TV.

“I think it will be a real positive in dampening inflation,” he said. “It’s going to be incredibly important in terms of productivity in the global economy, and I think some people are confused right now over the valuations.”

Waldron is expecting further market declines to be modest. “I don’t know that it will be all that more pronounced from here,” he said.

Asked about credit market risks, Waldron singled out the subprime lending market. “I do think the weakest part of the economy is that lower-end consumer, and there has been a lot of lending into the subprime parts of the economy,” he said.

He also said standards in underwriting have begun to slip, but that doesn’t mean there will be a credit crisis. “If the economy hangs in there, the credit markets will be fine,” he said.

Apollo Global Management Inc. CEO Marc Rowan was similarly sanguine, downplaying Jamie Dimon’s concerns that there are “cockroaches” in credit markets. “There’s nothing that I see that is systemic,” Rowan said at the forum.

The shock from tariffs and high interest rates is filtering into the economy, but credit statistics are “improving rather than declining,” he said. “That does not mean we will not have late-cycle banking behavior.”

AI, Dollar

Meantime, Algebris Investments’ founder and CEO Davide Serra advised investors to reduce their allocation to the world’s top technology companies as he made a bearish case for AI.

“The likelihood is that we are going to have a significant correction,” he told the event earlier Wednesday.

In another hotly debated topic at the gathering, GIC Pte’s Lim Chow Kiat and Franklin Templeton’s Jenny Johnson signaled doubts surrounding the dollar’s position as the pre-eminent currency of global finance are overblown.

“I don’t think there’s a question about the dollar’s dominance — I think there’s a question about how much it gets chipped away,” Johnson said at the forum.

The weak dollar has forced Temasek Holdings Pte to hedge against its decline, Dilhan Pillay, CEO of the Singapore state investor, told the gathering.

“The cost of hedging has now gone up because, I find, everybody’s hedging,” he said.

--With assistance from Low De Wei, Paul Dobson, Avril Hong, Andy Clarke, Joanne Wong, Joyce Koh, Shery Ahn, Jonas Bergman and Ruth Carson.

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