The “Smartest People on Wall Street” were also surprised by the Trump election but have recovered enough to issue ten themes or expectations that might inform your investing decisions:
- “Expected returns: Only slightly higher.” (Probably!)
- “US fiscal policy: A pro-growth agenda.” (Only in the short-term . . )
- “US trade policy: Concerns are likely overdone.” (Probably!)
- “EM risk: ‘Trump tantrum’ is temporary.” (EM = Emerging Markets)
- “Trump and trade: Hedge with RMB.” (RMB = Chinese currency)
- “Monetary policy: Focusing the toolkit on credit creation.” (Leading a horse to water . . .)
- “Corporate revenue growth recession: Signs of inflection.” (Signs of ending already.)
- “Inflation: Moving higher across DM.” (DM = Developed Markets, like U.S.)
- “The next credit cycle: Kinder and gentler.” (Thanks to Dodd-Frank?)
- “The ‘Yellen Call’ 2.0: Now with contingent knock-in.” (Only if inflation surges.)
Now that you know what Goldman Sachs thinks, what do you think and why?
Now, what will you do with that information?