Goldman Sachs' sales and trading department has recently received client inquiries indicating that global investors are focusing on several key issues. These concerns include worries about the valuation bubble of U.S. tech stocks, expectations for capital flows, and timing judgments for investments in major Asian markets.
On October 16, Goldman Sachs' latest research report stated that the bank's global equity strategist Germaine Khong recently summarized the most common discussion topics on the trading desk. From whether U.S. tech stocks are in a bubble zone to the turning point judgments in Asian markets such as China and India, investors are trying to find certainty in a high-valuation environment.
Goldman Sachs' Chief Global Equity Strategist Peter Oppenheimer views the bubble issue as, although tech sector valuations have risen, they have not yet reached historic bubble levels. He pointed out that the current rise in tech stocks is primarily driven by fundamental growth rather than irrational speculation, and leading companies have exceptionally strong balance sheets, which is a key difference from previous bubble periods.
Regarding the Asian market, the Goldman Sachs team expects that India's earnings downgrade cycle is nearing its end, Vietnam's inclusion in the FTSE Emerging Markets Index could bring about $1.4 billion in passive fund inflows, and progress in corporate governance legislation in South Korea may become a positive catalyst in the fourth quarter.
<h2>U.S. Stocks: Bubble or Reasonable Valuation?</h2>
The core question that investors are most concerned about is whether current valuations have reached bubble levels.
Goldman Sachs found that by comparing the return composition in the 12 months leading up to the peak of the internet bubble, the performance of tech stocks in 2000 was driven more by high valuations than by earnings growth.
Peter Oppenheimer noted that there are indeed some characteristics in the current market that resemble historical bubbles, including rising absolute valuations, increased market concentration, heightened capital intensity among leading companies, and the emergence of vendor financing. However, there are three key differences:
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First, the rise in the tech sector has so far been driven by fundamental growth rather than irrational speculation about future growth;
Second, the highest-returning leading companies have exceptionally strong balance sheets;
Third, the AI sector is currently dominated by a few existing giants, whereas most bubbles formed during periods of heavy inflows from investors and new entrants, leading to intense competition.
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Goldman Sachs believes that tech sector valuations are becoming stretched but have not yet reached levels consistent with historical bubbles. Goldman Sachs advises investors to continue focusing on diversified allocations.
<h2>U.S. Household Capital Flows: Will Fed Rate Cuts Trigger Fund Rotation?</h2>
Some investors expect that the Fed's rate-cutting cycle will catalyze a rotation of funds from money market funds to the stock market, but Goldman Sachs predicts that household stock demand will be funded by income rather than asset rotation.
Goldman Sachs forecasts that households will become the largest source of stock demand next year, with net purchases of $520 billion in 2026, a year-on-year increase of 19%.
<h2>Chinese Market: What to Watch Next?</h2>
Investor attention in the Chinese market is focused on the third-quarter GDP data on October 20, the Fourth Plenary Session on October 23, and the summit that may be held during APEC from October 31 to November 1
Recent discussions have mainly focused on Sino-U.S. relations, the 15th Five-Year Plan, and easing expectations. Investors are also inquiring about the rotation between growth and value styles, as well as third-quarter earnings expectations.
Data shows that both domestic and foreign investors have participated in the recent rally of the Chinese stock market.
<h2>India: When to Enter?</h2>
Goldman Sachs has held several strategy meetings in the past few weeks, noting an increase in market interest in India, with the core question being when to buy again. Data indicates that India's earnings downgrade cycle is nearing its bottom. Goldman Sachs believes the earnings cycle may recover before the end of the year.
The Goldman Sachs strategy team previously pointed out that factors reversing the poor performance of the Indian market include: reversal of the earnings cycle, reduced valuations, and effective policy support.
Investors should pay attention to corporate forward-looking comments to understand the impact of the Goods and Services Tax reduction on demand trends, as well as the potential resistance brought by U.S. tariffs effective August 27.
<h2>Vietnam: Impact of FTSE Index Upgrade</h2>
Historical data shows that markets included in the FTSE Emerging Markets Index typically rise before the announcement and perform poorly afterward (with the exception of Saudi Arabia), and outperform in the quarter prior to the effective date.
Goldman Sachs estimates that index rebalancing may bring about $1.4 billion in passive fund inflows, but due to benchmark performance pressure, the likelihood of large-scale inflows from actively managed funds seems low.
<h2>South Korea: Positive Catalysts in Q4</h2>
For the South Korean market, Goldman Sachs believes that events that could serve as positive catalysts in Q4 include the passage of corporate governance legislation (mandatory cancellation of treasury shares, reduction of dividend taxes).
The market is also discussing other plans that may be launched in 2026. Despite the recent market rebound, South Korea still maintains a significant discount relative to emerging and developed markets

Goldman Sachs clients are currently focused on the following key issues: whether U.S. technology stocks are in a bubble zone, and the turning point judgments for Asian markets such as China and India. Goldman Sachs believes that while U.S. technology stock valuations are high, they have not reached bubble levels, with the rise driven by fundamentals rather than speculation; the Chinese market will next focus on GDP data, the Fourth Plenary Session, and policy direction; the earnings downgrade cycle in India is nearing its end, and a recovery may occur before the end of the year

- Goldman Sachs' recent client inquiries indicate global investors are focused on key issues, including concerns over U.S. tech stock valuations and investment timing in major Asian markets.  
- The firm’s global equity strategists suggest that while tech valuations are tightening, they have not yet reached historical bubble levels, driven primarily by fundamental growth rather than speculation.  
- In Asia, Goldman anticipates a nearing end to India's earnings downgrade cycle and potential passive fund inflows from Vietnam's inclusion in the FTSE Emerging Markets Index, while South Korea may see positive catalysts from corporate governance legislation.

The most concerning issues for Goldman Sachs clients at present