Global stocks are on pace for their worst run since the European debt crisis a decade ago and Goldman Sachs Group Inc. strategists are among those warning that more selling is possible.

The MSCI All Country World Index is falling for a ninth day Wednesday, the longest losing stretch since 2011 -- a period when the burden of public debt threw the euro-area’s viability into question, rattling investors.

The slide in the gauge is rapidly erasing a bounce from mid-June that a Goldman team led by Peter Oppenheimer described as a “bear market rally.” 

“Its duration and magnitude were not unusual relative to the experience of previous decades,” the strategists wrote in a note. “We expect further weakness and bumpy markets before a decisive trough is established.”

The MSCI All Country World Index has fallen 9 per cent since mid-August and would reach the lowest levels since the pandemic fallout of 2020 if its sinks through June’s nadir. A panoply of risks spanning Federal Reserve monetary tightening to fight inflation, Europe’s energy crisis and China’s economic slowdown are all at play.

“The short term is bearish and in September and October is when you usually get markets going down sharply,” Chris Wood, global head of equity strategy for Jefferies LLC, said on Bloomberg Television.

Some technical measures suggest a hiatus in the downward drop is possible. In the past two decades, the MSCI All Country World Index has jumped an average of at least 1 per cent over 10 and 20 days after nine-day losing streaks, according to data compiled by Bloomberg.

For now, caution appears to be the watchword: dollar strength coursed through global markets on Wednesday, Treasury yields held a surge on expectations of a pugnacious Fed and an Asian share gauge slid to levels last seen in 2020.

The big question remains “inflation and how the central banks have to react to this,” Joyce Chang, global head of research at JPMorgan Chase & Co., said on Bloomberg Television. “We are front-loading all of these central bank moves so at what point can they pause, really sit back and see where inflation settles?”

Meanwhile, value stocks stand to continue their outperformance over their growth equivalents amid weakening economic condition, Goldman strategists led by Cormac Conners wrote in a separate note. Goldman economists forecast a one in three probability of a recession in the coming year and “history shows value stocks outperform around the start of recessions,” the strategists wrote.