Goldman Sachs CEO David Solomon: The macro setup for 2026 is quite good

Speakers

David Solomon — Chairman and CEO of Goldman Sachs

Summary

The macro setup for 2026 is described as "quite good," driven by three pillars: strong fiscal stimulus, a surge in AI capital investment, and a significant deregulatory swing.
Goldman Sachs' economist Yan Hatzius forecasts 2.9% real growth and 5% nominal growth for the US, which is at the higher end of consensus.
A resurgence in deal activity (M&A) and IPOs is expected, particularly "very large IPOs," though small-cap IPOs face headwinds and may prefer private exits.
Long-term concern remains regarding US deficit spending, though the US Dollar's dominance currently provides "latitude" against bond market shocks.

Trade Ideas

Ticker	Direction	Speaker	Thesis	Time
GS /MS /JPM	LONG	David Solomon Chairman and CEO of Goldman Sachs	"I think a lot of deal activity... I think we're going to see more IPOs this year... potentially some very very large IPOs." Plus, "huge deregulatory swing... resources can be freed up." Investment banks generate significant fees from M&A and IPO underwriting. A return of "deal activity" directly boosts revenue. Additionally, deregulation lowers compliance costs and capital constraints for large banks. LONG Investment Banks as the primary beneficiaries of the reopened capital markets and regulatory relief. Deal activity stalling due to geopolitical shocks or interest rate volatility.	0:03
AI SECTOR	LONG	David Solomon Chairman and CEO of Goldman Sachs	"You have a pretty significant capital investment surge around AI and this technology, which is obviously... very stimulative to the economy." Solomon identifies AI capex as a core pillar of the current economic strength. Continued "surge" in investment implies sustained revenue for the AI infrastructure and technology value chain. LONG AI Sector to align with the massive capital deployment cycle Solomon describes. Overinvestment leading to a capex trough if ROI disappoints.	—
PRIVATE MARKETS /BX /KKR	LONG	David Solomon Chairman and CEO of Goldman Sachs	"Smaller IPOs require... more discount... smaller companies it's always more attractive to sell a company for 100% of its value and get that cash today privately." While the IPO market is opening for large caps, Solomon notes that small companies are better off selling privately. This dynamic feeds deal flow to Private Equity firms and alternative asset managers who act as the buyers/consolidators in private markets. LONG Private Equity managers (like Blackstone/KKR) who benefit from robust private market transaction volume. Higher interest rates impacting leverage costs for private deals.	—
US TREASURIES	WATCH	David Solomon Chairman and CEO of Goldman Sachs	"I have real concern for the continued level of deficit spending... if we don't get it under control... speed bumps or shocks." Solomon warns that while the bond market is currently benign due to a lack of alternatives to the dollar, spiraling deficits create a long-term risk of market "shocks" (yield spikes). WATCH Treasuries for signs of the "speed bumps" Solomon predicts if growth does not outpace debt. A sudden loss of confidence in US fiscal sustainability could spike yields rapidly.	—
S&P 500	LONG	David Solomon Chairman and CEO of Goldman Sachs	"The macro setup is quite good... you have this combination of strong fiscal stimulus... capital investment surge around AI... huge deregulatory swing." Solomon outlines a "constructive environment" with three major tailwinds (Stimulus, AI Capex, Deregulation) and forecasts 2.9% real GDP growth. This combination historically drives equity market performance. LONG US equities to capture the forecasted growth and favorable policy environment. Inflation reigniting due to stimulus; failure of AI capex to generate returns.	—