Goldman Sachs: It's 'too early to fear a full-on global meltdown' in stocks

The chief executive of Goldman Sachs Asset Management's (GSAM) international division played down fears of a stock market correction despite concerns over international trade and hefty valuations.

"It seems a bit early to us to be concerned about a full-on, global meltdown in equities," Sheila Patel told.

"Are there valuation issues in equities? Certainly. Have we seen clients get more cautious in areas such as U.S. equities? Definitely. But have we seen full-scale fear come into the marketplace? No … We are not poised for that crack in the market just yet."

Patel's comments come as global investors keep a close eye on President Donald Trump's next move on international trade.

Withdrawing from trade deals and threatening import tariffs in order to protect and promote U.S. business, Trump has turned the status quo of global trade on its head. GSAM's Patel said clients were looking to actively manage their portfolios to mitigate against potential upsets in global markets caused by trade disputes and potential tariffs, particularly in emerging markets (EM).

"We've seen clients both very active in EM debt and equities. In the latter, they're focused on, and we're focused on, more domestically-orientated stories and small and mid-cap (businesses).

"The things they're avoiding and the things that people are worried about are big, global multi-nationals and their exposure to these kinds of trade tariffs," she said.

The potential for a trade war between the world's biggest economies, the U.S. and China, is the biggest concern for investors right now.

Trump unveiled plans for tariffs on a list of Chinese imports in March, including a 25 percent tariff on steel and 10 percent on aluminum. China promised to retaliate in kind, saying it would target products from the U.S., including soybeans, cars and whiskey.

Source: CNBC

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