"Undoubtedly, forward-looking forecasts are not to be taken as gospel. However, as a guide, they can offer a ton of value, especially for those who aren't quite sure how the stage is set for a new year. Undoubtedly, you've probably heard that valuations are on the higher end, and, as a result of that, prospective returns for the decade ahead will be on the more modest side."
"Notably, Goldman Sachs sees more Fed cuts in 2026, perhaps in response to softness in the labor market. Add the potential for a new, perhaps far more dovish Fed chair, and it seems like we might get a pair of cuts for the new year. Of course, tariffs and other macro headwinds are worth watching closely. And while 2026 is not expected to be a recession year, there are risks and tech trends (of course, there's AI) to look out for."
Goldman Sachs' 2026 outlook notes elevated valuations and forecasts more modest prospective returns for the coming decade. The bank expects 2026 to favor active stock picking as the market rally broadens beyond the Magnificent Seven, creating opportunities across small caps, middle-income consumer names, and non-U.S. markets. The outlook anticipates additional Fed cuts in 2026 — potentially two — aided by labor-market softness and the possible appointment of a more dovish Fed chair. Tariffs and macro headwinds present risks. The year is not expected to be a recession, but tech trends including AI remain important drivers. Nike is highlighted as a middle-income consumer play, but competition and uncertainty persist.
Read at 24/7 Wall St.
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