Analyst Read: Goldman Sachs Estimates

A look at expectations from Goldman Sachs.
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For today’s research, here are some macro estimates and expectations from Goldman Sachs (GS).

With a divided U.S. Congress, we’re unlikely to see substantial spending increases apart from fiscal stimulus.

  • More likely to get a smaller fiscal stimulus package around $1 trillion (5% of GDP), much less than the $2.5 trillion that was expected with a Blue Sweep
  • More likely to see a “placeholder” stimulus package before December 11th that might include enhanced unemployment and small business support
  • Unlikely to see substantial individual or corporate tax increases in the near term

Goldman’s working assumption is that we get an FDA-approved vaccine by the end of 2020 and that enough people will take it to achieve herd immunity by Summer 2021. 

  • This seems plausible to me but might be a tad aggressive in terms of timing.

Goldman Sachs estimates higher global growth than the rest of Wall Street.

  • Global 2021 GDP growth of 6.0% versus consensus estimates of 4.6%
  • Global 2022 GDP growth of 5.2% versus consensus estimates of 3.7%
  • GDP boost from a vaccine in 2021 estimated to be around 2.0%
  • China’s output is mostly back to normal, so China’s growth is more limited from here.

They are tempered by their concerns concerned about the Covid-19 resurgence.

  • In response to significant spikes in Covid-19 cases, we’re seeing Europe enforce lockdowns, and so far mobility is down about 1/4 as much as it was in March.

Goldman Sachs expects neither changes to interest rates nor high inflation rates (expecting under 2.0% inflation). 

  • There is still significant “slack” in the economy.

All-in-all, I don’t necessarily find a reason to disagree with these forecasts but generally think the return-from-home will be a gradual grind over 2021.

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