We’re getting to the time of year when all the banks start rolling out their predictions for the next year.
I thought Goldman Sachs’ in particular, were worth sharing with you.
Here’s their top five.
First, central banks are rewriting the playbook.
Goldman Sachs’ bet is that the U.S. Fed is going to lower rates twice, and it looks like Trump is going to pick somebody very dovish.
The thinking is that it will be Kevin Hassett.
Nobody knows for sure, but that’s a popular bet.
It seems like the world is getting used to a new inflation regime.
For many years, since post-World War II the regime was lower rates, low inflation.
But it looks like instead of a 2% inflation rate, we’ll be targeting 3% - 3.5%. Which is not good.
This will create a lot more political instability as we go on and people can’t afford to eat.
It’s going to be a problem.
Goldman Sachs’ second big takeaway is that AI CapEx is the new Global Arms Race.
We’ve been talking a lot about this.
Hyperscalers (data centers) now account for 27% of S&P 500 capital spending. Capital spending means companies investing in equipment and building out plants.
The market has underestimated their spending. We’re still early in the AI buildout - semiconductors, infrastructure, agentic AI software, cybersecurity, data management…
Those are all in the slipstream of this happening. We have massive opportunities in that, which we focus on quite a bit here at Behind the Markets.
Goldman’s third big takeaway is that market concentration is high, but fundamentals are doing the heavy lifting. We all know this.
Right now the top 10 U.S. companies represent 40% of the S&P 500, but it’s different from the dot-com era in one big way.
The companies that really popped during the dot-com era were companies that didn’t have any profits.
So in that way, this is more like the go-go sixties, and, frankly, the twenties, where you had a lot of profits among a small group.
So unlike the dot-com boom, you still have good balance sheets, strong earnings and mega big margins underpinning these.
Now the real opportunity, according to Goldman Sachs, is in small- and mid-cap “picks and shovels” plays that enable the AI boom and America First reshoring.
And this is exactly what we concluded…
Which is why we’re launching our new product, America First Fortunes, a week from today.
If you would like to be first to hear about the product and join live when we talk about our top America First Stocks next week, go here now to register.
Goldman Sachs also says private markets are stabilizing.
Their equity valuations are high, but they’re not supported by earnings because most of these are small, private companies.
What we’re seeing here, though, is exit markets, IPOs, are really reopening.
When there’s turbulence in the market like we saw after liberation day, and the budget wasn’t passed and there was a shutdown, investment banks tell companies that want to go public, “you gotta wait.”
But now we’re starting to see the IPO market really open up, which is great.
And finally, their fifth big trend for 2026 is economic security and power demand will define the next decade.
Boy, oh boy, doesn’t that sound like what we talk about a lot?
“Economic Security” is what we talk a lot about with America First Fortunes.
It says here in Goldman’s note, “governments are spending aggressively on supply chain resilience, defense, energy transition, infrastructure upgrades.”
Yes, yes, yes, and yes - we are doing all of this. That’s why we’re launching America First Fortunes in a week.
Here’s your chance to join live when we unveil what we’ve been working on all year long - just pre-register here.
There’s a big infrastructure project happening right here in Florida. Port Everglades is being upgraded for a bunch of reasons including national defense, container, petroleum, gas. It’s really become a jet fuel hub.
Imagine a conflict happens and we need to get to South America or whatever, for Venezuela and all this stuff - this is where all the fueling for the military happens - very important.
We’re really upgrading our entire infrastructure.
We’re entering now an era of great power competition with China. That’s the bottom line.
And we are too vulnerable to do that the way things are right now.
So we have to tool up here on our shores. We have to make sure we can withstand something like this.
Remember, you watch those old World War II documentaries and you know, it’s “Germany attacks France, takes over France” and then it swings and goes after Britain, and then it goes to Russia. And then America enters the war and starts outmanufacturing everybody.
And we don’t have that right now.
So, again, we need to be able to really scale up ship building, cars, steel, all these things in case, God forbid, a war comes our way.
We have a great power competitor on the block. Bottom line - we gotta prepare for it.
And that’s what President Trump is doing.
I’m not one of these people who thinks Trump is a God-figure - I don’t look at the world that way.
He’s not perfect - nobody’s perfect.
But I do believe he’s addressing serious issues.
And, as a result there are big moneymaking opportunities for us.
But more importantly, over time, our kids and grandkids will grow up in a safer world.
So if we can align moneymaking opportunities with that, I’m all in.
If you’d like to join me, register here to join us live next Thursday, December 11th at 1:00pm Eastern Time.
Have a great day. I’ll see you tomorrow.
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