Odd Lots Goldman's Hatzius and Kostin on Markets and Macro in 2025
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Dec 2, 2024 
Jan Hatzius, Chief Economist at Goldman Sachs, and David Kostin, Head of U.S. Equity Strategy, tackle the macroeconomic uncertainties as we approach 2025. They discuss the potential impacts of new administration policies on tariffs and inflation, emphasizing how these factors affect market dynamics. The duo explores the balance of investor sentiment amid high valuations, the role of AI in shaping market expectations, and the complexities of economic growth linked to migration trends. Their insights provide a roadmap for navigating the turbulent waters of today’s economy.
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Policy Uncertainty
- Current economic uncertainty stems from the new administration's policy changes.
- These changes affect areas like tariffs, immigration, and the size and scope of government.
2024 Soft Landing
- The 2024 soft landing was due to the pandemic's unique supply-side shock.
- This differs from past demand-driven cycles, allowing simultaneous inflation decline and economic growth.
S&P 500 Forecast
- Goldman Sachs forecasts 11% earnings growth in 2025 and 7% in 2026, driven by sales growth and margin expansion.
- A slightly lower market multiple is also anticipated, leading to a 6,500 S&P 500 target.
