This morning, investors appear to be taking the news to heart. The STOXX Europe 600 fell 1.41% in early trading. The U.K.’s FTSE 100 was down 1.11% before lunch, and Japan’s Nikkei 225 gave up 1.74%. South Korea got hit the worst: The KOSPI was down 2.37%.

Prior to the opening of the market in New York, S&P 500 futures are down more than a full percentage point.

Wall Street expects tech stocks to take a hammering this morning: Nasdaq 100 futures were down 1.35%; Palantir is down nearly 7% in overnight trading; Tesla is down 2.45% premarket; and Meta is down 1.22%.

The bloodbath began at the Global Financial Leaders’ Investment Summit in Hong Kong. Onstage, Goldman Sachs CEO David Solomon said: “It’s likely there’ll be a 10% to 20% drawdown in equity markets sometime in the next 12 to 24 months.”

On the same panel, Morgan Stanley CEO Ted Pick agreed: “We should also welcome the possibility that there would be drawdowns, 10% to 15% drawdowns that are not driven by some sort of macro cliff effect,” he said.

Morgan Stanley Wealth Management’s chief investment officer, Lisa Shalett, issued a note to clients yesterday arguing that now may be the time to sell speculative tech stocks. “With more questions than answers, we maintain maximum diversification. Consider taking profits in high-beta, small/micro-cap, speculative and unprofitable equities and redeploying to large-cap core and quality stocks, including the ‘Mag 7’ and gen AI beneficiaries in financials, health care, and energy,” she wrote.

At the same conference but speaking on a different panel, chair of UBS, Colm Kelleher, warned: “If you look at the insurance business, there is a looming systemic risk coming through because of lack of effective regulation.” Insurance companies are large buyers of private credit—loans to companies that pay higher interest rates than government bonds but carry higher risks. Kelleher said that the providers of these loans were using the most lenient ratings agencies they could find globally, thus underplaying how risky or illiquid these loans could become.

Fortune reported this weekend that loan originators were imposing increasingly strict legal terms into private credit deals, a sign that lenders sense trouble on the horizon.

The day before, two members of the Federal Reserve’s rate-setting Open Market Committee both said they were undecided about whether to continue lowering interest rates in December. Fed governor Lisa Cook told the Brookings Institution in Washington, D.C.: “As always, I determine my monetary policy stance each meeting based on the incoming data from a wide variety of sources, the evolution of my outlook, and the balance of risks.” She added, “Every meeting, including December’s, is a live meeting.”

Federal Reserve Bank of Chicago president Austan Goolsbee, talking to Yahoo Finance, said: “I’m not decided going into the December meeting,” and “my threshold for cutting is a little bit higher than it was at the last two meetings.”

The ongoing U.S. government shutdown added to the economic gloom. Investors are flying blind—U.S. trade data should have been published today but won’t be. Instead, investors are looking at less reliable private data. The ISM manufacturing index for October signaled a contraction at 48.7%, well under the consensus expectation of 49.3%.

Here’s a snapshot of the markets ahead of the opening bell in New York this morning:

• S&P 500 futures were down 1.16% this morning. The last session closed up 0.17%. 
• The STOXX Europe 600 was down 1.41% in early trading. 
• The U.K.’s FTSE 100 was down 1.11% in early trading. 
• Japan’s Nikkei 225 was down 1.74%. 
• China’s CSI 300 was down 0.75%. 
• The South Korea KOSPI was down 2.37%. 
• India’s NIFTY 50 was down 0.64%. 
• Bitcoin was down at $103.6K.