Goldman's view is more like a microcosm of the prevailing view on Wall Street. Wall Street is increasingly worried that the Fed's determination to curb inflation will tip the global economy into recession and rattle financial markets, with a growing number of investment banks recently issuing bearish views.

The risk of a global recession and stock market decline is rising

After the recent bond sell-off, Goldman Sachs expects the probability of a future global recession to rise to more than 40 percent, "which historically implies an elevated risk of future declines in equities."

"Equity valuations at current levels may not fully reflect the risks involved and may have to fall further to reach a market bottom," they argue. They added that real yields remained the main headwind against equity gains.

Goldman's view is more like a microcosm of the prevailing view on Wall Street. Wall Street is increasingly worried that the Fed's determination to curb inflation will tip the global economy into recession and rattle financial markets, with a growing number of investment banks recently issuing bearish views.

So far, more than $8.4 trillion has been wiped off the value of stocks in the MSCI World equity index since its mid-September peak, and some investors say the decline may not be over yet.

Stocks are going from 'irreplaceable' to 'There are better options'

All this suggests, say strategists, that the era of "TINA, There Is No Alternative" for stocks is over.

While the fall in bond yields since the global financial crisis has enhanced the appeal of equities, they wrote, "investors Are now faced with a more Reasonable alternative (" TARA," There Are Reasonable Alternatives) - and bonds seem more attractive."

Goldman strategists said in an asset allocation note that they have raised their three-month credit rating recommendation to neutral. 'Investment-grade credit yields look attractive, both in absolute terms and relative to the value of equities,' they wrote.

Last week, U.S. equity strategists at Goldman Sachs lowered their year-end target for the S&P 500 to 3,600 from 4,300. Similarly, Goldman Sachs 'European strategists lowered their targets for European equity indicators, cutting their 2023 earnings per share growth forecast for the Stoxx Europe 600 index from zero to -10%, and predicting that the European bear market has not yet found a bottom.