High Growth is the Only Solution to Deficit Problem
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 day ago
0mins
Should l Buy GS?
Source: stocktwits
- Growth Expectations: Goldman Sachs CEO David Solomon emphasized that the U.S. economy must achieve a growth rate higher than its current level to address the projected $1.9 trillion deficit by 2026, which represents 5.8% of GDP, warning that failure to control the deficit could lead to economic shocks in the future.
- Drivers of Growth: Solomon identified deregulation, a surge in capital expenditures, and fiscal stimulus as key factors that will provide a stronger growth foundation for the U.S. economy, particularly over the next few years.
- Bond Market Response: Despite the Congressional Budget Office forecasting a rise in the deficit to $3.1 trillion by 2036, accounting for 6.7% of GDP, Solomon noted that the bond market remains calm due to a lack of better investment alternatives, reflecting confidence in the U.S. economy and the dollar.
- Infrastructure Development Outlook: Treasury Secretary Scott Bessent expressed optimism for the economy in 2026, anticipating many factory completions that will boost job growth, and highlighted that infrastructure projects require time to set up, laying the groundwork for long-term economic recovery.
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Analyst Views on GS
Wall Street analysts forecast GS stock price to fall
13 Analyst Rating
6 Buy
7 Hold
0 Sell
Moderate Buy
Current: 904.550
Low
604.00
Averages
848.09
High
1048
Current: 904.550
Low
604.00
Averages
848.09
High
1048
About GS
The Goldman Sachs Group, Inc. is a global financial institution that delivers a range of financial services to a large and diversified client base that includes corporations, financial institutions, governments and individuals. Its segments include Global Banking & Markets, Asset & Wealth Management and Platform Solutions. The Global Banking & Markets segment offers a range of services, including financing, advisory services, risk distribution, and hedging for its institutional and corporate clients. It facilitates client transactions and makes markets in fixed income, equity, currency and commodity products. The Asset & Wealth Management segment manages assets and offers investment products across all asset classes to a diverse set of clients. It also provides investing and wealth advisory solutions. The Platform Solutions segment includes consumer platforms, such as partnerships offering credit cards and point-of-sale financing, and transaction banking and other platform businesses.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Bond Market Response: Despite the Congressional Budget Office forecasting a rise in the deficit to $3.1 trillion by 2036, accounting for 6.7% of GDP, Solomon noted that the bond market remains calm due to a lack of better investment alternatives, reflecting confidence in the U.S. economy and the dollar.
- Infrastructure Development Outlook: Treasury Secretary Scott Bessent expressed optimism for the economy in 2026, anticipating many factory completions that will boost job growth, and highlighted that infrastructure projects require time to set up, laying the groundwork for long-term economic recovery.
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- Fed Chair Selection Context: Warsh was initially Trump's choice, but ultimately Jerome Powell was appointed due to Treasury Secretary Steven Mnuchin's persuasion, a decision that may have long-term implications for future monetary policy.
- Economic Burden Analysis: A report from the New York Fed revealed that 94% of the economic burden fell on U.S. importers, as the average tariff rate rose from 2.6% to 13%, yet foreign prices did not significantly drop, indicating the counterproductive effects of tariff policies.
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- Goldman Sachs Executives Divest: Goldman Sachs CFO Denis Coleman divested 11,623 shares in a price range of $933.38 to $945.4, generating proceeds of $10.94 million, and after the sale, he held 33,574 shares, reflecting a cautious stance amid market volatility.
- Delta Air Lines Executive Sale: Delta's EVP of Global Sales & Distribution, Steven Sears, sold 38,600 shares at an average price of $75.05, totaling $2.90 million, reducing his holdings to 104,404 shares, which may impact the company's future sales strategies.
- American Express CIO Sale: American Express CIO Ravi Radhakrishnan disposed of 15,000 shares between $356.14 and $357.13, generating $5.35 million in proceeds, while retaining 8,945 shares, indicating a short-term outlook on the company's stock price.
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- Long Positions: On the long side, Goldman selected companies such as Cloudflare, CrowdStrike, Palo Alto Networks, Oracle, and Microsoft, which are seen as beneficiaries in building AI infrastructure and providing security defenses, expected to thrive amid future market demand.
- Short Positions: Conversely, on the short side, Goldman chose companies like Monday.com, Salesforce, DocuSign, Accenture, and Duolingo, noting that their operations are easily replaceable by AI automation, reflecting concerns about their future performance.
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See More
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- Growth Expectations: Goldman Sachs CEO David Solomon emphasized that the U.S. economy must achieve a growth rate higher than its current level to address the projected $1.9 trillion deficit by 2026, which represents 5.8% of GDP, warning that failure to control the deficit could lead to economic shocks in the future.
- Drivers of Growth: Solomon identified deregulation, a surge in capital expenditures, and fiscal stimulus as key factors that will provide a stronger growth foundation for the U.S. economy, particularly over the next few years.
- Bond Market Response: Despite the Congressional Budget Office forecasting a rise in the deficit to $3.1 trillion by 2036, accounting for 6.7% of GDP, Solomon noted that the bond market remains calm due to a lack of better investment alternatives, reflecting confidence in the U.S. economy and the dollar.
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See More
