Group 1 - The article conveys New Year wishes from Goldman Sachs, emphasizing success and progress in the upcoming year [1] - It highlights the company's core values, including teamwork, customer focus, integrity, and pursuit of excellence [4]

Core Viewpoint - The Goldman Sachs Global Macro Conference highlighted optimistic projections for global economic growth, particularly in the U.S. and Asia, while acknowledging challenges in Europe and the impact of geopolitical tensions on market performance [1][2]. Economic Outlook - Goldman Sachs economists forecast a robust global real GDP growth of 2.9% by 2026, surpassing market expectations, driven by reduced tariff resistance and real income growth [4]. - The U.S. core inflation is expected to decline to 2.1% by the end of 2026, influenced by the waning effects of tariffs and decreasing housing and wage inflation [4]. - In Asia, specifically China, real GDP growth is projected at 4.8% by 2026, supported by strong export growth and ongoing government policy easing, despite weak domestic demand [6]. - The Federal Reserve is anticipated to implement two rate cuts of 25 basis points each in June and September, leading to a final interest rate range of 3-3.25% [6]. - Emerging markets are expected to maintain resilience, with strong growth anticipated in several emerging Asian markets by 2026 [7]. - In Europe, the Eurozone's real GDP growth is projected at 1.3% for 2026, facing challenges from increased export competition with China, while core inflation is expected to drop to 1.8% due to lower energy prices and a stronger euro [9]. Stock Market - The macro environment is favorable for stock growth in the Asia-Pacific region, with stable valuations expected [14]. - The demand for semiconductor manufacturers is anticipated to extend a prolonged super cycle, suggesting continued investment in this sector [14]. - The S&P 500 index is projected to see a 12% earnings growth, which is a key driver of returns in the U.S. stock market [16]. - Companies benefiting from capital expenditures due to investments from other firms are expected to see significant growth, with market consensus forecasts likely to be revised upward [16]. - Despite a challenging macro environment, European bank stocks are outperforming, and there is a positive shift in capital inflows into the European stock market, with increased M&A activity expected among small and medium-sized enterprises [17]. - Over 60% of conference attendees believe that Asian stocks, excluding Japan, will perform the strongest by 2026, with technology stocks anticipated to lead the market [18].

Key Points - The core viewpoint of the article emphasizes that the global M&A landscape in 2026 will be characterized by strategic restructuring and scaling, driven by significant public market funds, private capital, and the profound impact of AI on the macro environment [1][2]. Group 1: Drivers of M&A Activity in the Asia-Pacific Region - A wave of corporate governance reforms is enhancing transparency and accountability, creating more attractive opportunities for local and international buyers, sellers, and investors [4]. - The surge in technological innovation and strategic expansion is fostering a vibrant environment for consolidation and transformation in key industries across the Asia-Pacific, leading to more mega-deals [5]. - Financial investment institutions are increasingly active in M&A activities in the Asia-Pacific region, driven by a growing focus on high-value growth opportunities and capital deployment needs [6]. Group 2: Global Trends Influencing M&A - The AI-driven innovation supercycle is broadening the scope for cross-industry strategic mergers and acquisitions, as AI disrupts all sectors and increases demand for digital infrastructure, energy, semiconductors, and hardware optimization [7]. - Rising tariffs and a more fragmented global trade environment are prompting companies to rethink their growth strategies and geographic footprints, with cross-border M&A transactions in the Asia-Pacific becoming particularly active [8]. - The private market is becoming a central hub for M&A transactions, with an increase in privatization transactions, which saw a 31% year-on-year growth in global transaction value, allowing financial investment institutions to recapitalize, restructure, and strategically reshape private companies [9]. Group 3: Complex Transactions and Investor Activism - The complexity of transactions is increasing due to changing financial conditions, regulatory requirements, and business priorities, necessitating more customized and flexible capital solutions to support large-scale capital expenditures and acquisitions [10]. - The current environment is favorable for activist investors, with the number of related activities steadily rising, driven primarily by M&A-related demands, pushing companies towards clearer transformation and strategic direction [12]. - Fundamental drivers of M&A include the financing conditions in public and private markets, the recovery of the IPO market, and the willingness and capability to pursue strategic deals, all of which are expected to play a role in 2026 [13]. Group 4: Future Outlook - As the market approaches 2026, it is poised for a new wave of strategic transformation, with companies focusing on capability-driven acquisitions to reshape their business portfolios and drive long-term growth [14].

Core Viewpoint - Goldman Sachs research indicates that despite a potentially lower stock market increase in 2026 compared to 2025, a global bull market is expected to continue, supported by earnings and economic growth [1][2]. Group 1: Market Outlook - The global economy is anticipated to expand across all regions in 2026, with the Federal Reserve expected to provide further moderate easing [1]. - The S&P 500 index is projected to reach a target price of 7,600, with an expected earnings growth of 12% [1]. - The STOXX 600 index is expected to rise to 625, with a 5% earnings growth [1]. - The TOPIX index is forecasted to reach 3,600, also with a 12% earnings growth [1]. - The MSCI Asia Pacific (excluding Japan) is projected to increase to 825, with a significant earnings growth of 19% [1]. Group 2: Investment Strategy - Diversification was a key theme in 2025 and is expected to continue into 2026, expanding across growth and value factors as well as various industries [1][2]. - The 12-month global forecast predicts a 9% increase in stock prices, with an 11% return rate in USD, primarily driven by earnings [5]. - Investors are encouraged to seek broad regional exposure, including emerging markets, and to combine growth and value stocks while focusing on various sectors [7]. Group 3: Market Dynamics - The stock market experienced a near 20% adjustment from mid-February to April 2025, followed by a rebound, leading to historically high valuations across all regions [2]. - The current market is in an optimistic phase, which typically accompanies rising valuations, indicating potential upside risks to core predictions [6]. - The valuation gap between U.S. stocks and other regions has narrowed, suggesting a more balanced improvement in earnings outside the U.S. [7]. Group 4: Technology Sector Insights - Concerns about a bubble in AI stocks are addressed, with the assertion that the dominance of the tech sector is not solely due to AI but has been supported by strong earnings growth since the financial crisis [8]. - The valuation of the largest five companies in the S&P 500 is not as extreme as during previous bubbles, such as the 2000 tech bubble peak [8].

Economic Outlook - Goldman Sachs projects China's real GDP growth to reach 4.8% in 2026, surpassing the market consensus of 4.5% [1] - Structural challenges such as weak consumer spending and a sluggish labor market persist, although the drag from the declining real estate market is expected to lessen [1] - The firm anticipates that increased exports and a reduction in the negative impact of the real estate sector will lead to a faster-than-expected economic growth this year [1] Trade and Inflation - The forecast for Producer Price Index (PPI) inflation is -0.7%, slightly better than the consensus expectation of -1.0% [2] - The PPI has been in deflation for over three years, prompting the government to implement "anti-involution" policies to curb price competition among manufacturers [2] - Goldman Sachs expects the current account surplus to rise from 3.6% of GDP in 2025 to 4.2% in 2026, contrary to the consensus prediction of a decline to 2.5% [2] Export Dynamics - The resilience of Chinese exports is attributed to three factors: rapid expansion of exports to emerging markets, limited ability of other countries to impose trade barriers against China in key mineral sectors, and greater growth potential in high-tech exports [5] - The firm predicts that export prices, measured in USD, will turn positive in 2026, increasing from -2.7% last year to 0.7% [6] Consumer and Labor Market - The labor market in China has been weak, with employment indices at their lowest levels in a decade, and nominal wage growth expected to slow to 3.8% year-on-year by Q3 2025 [7] - Targeted government policies are anticipated in 2026 to alleviate labor market pressures and support income growth, including subsidies for labor-intensive services and increased minimum wages [7] - Despite a forecasted slowdown in household consumption growth, government consumption is expected to accelerate, balancing the overall contribution of consumption to GDP growth [7] Real Estate Market - The Chinese real estate sector is in its fifth year of decline, with most activity indicators down by 50%-80% from peak levels in 2020-2021 [8] - There are no signs of stabilization in the real estate market, with high housing inventory and severe financing conditions for major developers [11] - Goldman Sachs predicts that the drag from the real estate sector on GDP growth will decrease by 0.5 percentage points annually, although it will still negatively impact growth in the coming years [11] Risks to Growth Outlook - The growth forecast faces slight downward risks due to weaker-than-expected momentum and a lack of urgency for significant policy easing from decision-makers [12] - Potential risks include renewed tensions in US-China relations, increased trade barriers from major trading partners, and intensified financial pressures on local governments and banks [12]

Global Economic Outlook - Goldman Sachs predicts a robust global economic growth of 2.8% in 2026, surpassing the market consensus of 2.6% [1][2] - The US economy is expected to grow by 2.8%, significantly higher than the market expectation of 2.0%, driven by reduced tariff drag, tax cuts, and a more accommodative financial environment [1][4] - China's economy is projected to grow by 4.8%, exceeding the market forecast of 4.5%, with strong exports offsetting domestic demand weakness [1][2] - The Eurozone is anticipated to grow by 1.3%, above the consensus of 1.1%, supported by fiscal stimulus in Germany and strong growth in Spain [1][2][7] US Economic Forecast - The US economy is expected to benefit from tax cuts, a loose financial environment, and reduced tariff drag, leading to a significant outperformance compared to market consensus [4] - Consumers are projected to receive approximately $100 billion in additional tax refunds in the first half of the year, accounting for 0.4% of annual disposable income [4] - Despite global GDP growth, the labor market remains weak, with employment growth rates in developed economies below pre-pandemic levels [6] Eurozone Economic Forecast - The Eurozone faces structural weaknesses exacerbated by competition from China, including population decline and high energy costs, yet is expected to grow at a "considerable" rate of 1.3% in 2026 [7] - Germany's GDP growth is expected to benefit from significant federal government spending increases, while Southern Europe, particularly Spain, is projected to maintain robust growth [7] Inflation and Monetary Policy - Inflation in the US is expected to moderate, with core PCE inflation currently at 2.3%, and factors such as falling oil prices and increased productivity contributing to a downward trend [8] - The Federal Reserve is anticipated to lower its policy rate by 50 basis points to a range of 3-3.25% in 2026, as inflation concerns are expected to be resolved [10] - The Bank of England is also expected to implement quarterly rate cuts, reaching 3% by the third quarter of 2026 [10] Market Implications - The basic predictions from Goldman Sachs are favorable for stocks and many emerging market assets, with the market already pricing in improved US economic growth and declining inflation [10] - However, concerns about a weak labor market potentially leading to recession fears and skepticism regarding the value of AI-related revenues may increase market volatility [10]

Group 1 - The core theme of the survey conducted among Goldman Sachs interns this year is to compare their perspectives on life planning, investment, and artificial intelligence with previous years, marking the 10th anniversary of the survey [1] - Over 2,100 interns participated in the survey, providing insights into their views and behaviors [1] Group 2 - 76% of respondents from business and finance backgrounds indicated their primary interests [4] - 63% of interns reported having made investments, while 37% have not invested at all, with their top two investment choices remaining unchanged since 2021 [12] - The majority of interns (97%) use AI tools in their personal lives, with 66% believing that emotional intelligence is more important than IQ for success [18][20] Group 3 - 84% of interns expect to be paired with a mentor when starting their new jobs, and 99% believe that interpersonal relationships are best built face-to-face [21][25] - When it comes to learning new knowledge at work, 33% prefer hands-on experience, while 27% favor discussions with others [26] - 62% of interns are interested in working abroad, whether for short-term tasks or long-term assignments [26] Group 4 - In terms of future aspirations, 96% plan to marry, 97% aim to buy a house, and 76% wish to raise pets by 2024 [28] - 34% of interns plan to retire between the ages of 55-65, while 30% wish to work as long as possible [30] - The most significant global influences anticipated in the next decade include geopolitical relations (68%), climate change (34%), and artificial intelligence (29%) [31]

Core Viewpoint - Goldman Sachs' research team emphasizes that interpreting and following China's Five-Year Plan could yield excess returns, introducing the "15th Five-Year Plan" investment portfolio [1][3]. Group 1: Five-Year Plan Goals - Since 2001, China has achieved nearly 90% of its quantitative growth and development targets across five Five-Year Plans [2]. - The details of the "15th Five-Year Plan" (2026-2030) will be officially announced in March next year, focusing on high-quality, safe, and balanced growth, technology/innovation, and improving people's quality of life [2]. Group 2: Excess Returns from Policy Adherence - Goldman Sachs' Asia macro team has developed tools to analyze China's policy environment, which is more nuanced than other major markets due to data availability and quality [3]. - Historical data shows that the MSCI China Index and CSI 300 Index have achieved an annualized total return of 8-10%, slightly below the nominal GDP growth rate of 11% [3]. - By utilizing text analysis based on large language models (LLM), the research indicates that investors could achieve an annualized excess return of 13% by adjusting their portfolios according to overall policy trends [3]. Group 3: Redefining Excess Return Investment Portfolio - The Chinese stock market is extensive and liquid, with over 6,800 listed companies and a total market capitalization of $19 trillion [5]. - Goldman Sachs' stock strategy team has constructed the "15th Five-Year Plan" investment portfolio based on 35 GICS sectors, focusing on industries expected to benefit from policy support and specifically mentioned in the plan [5]. - These sectors represent a total market capitalization of $13 trillion, accounting for 66% of the entire Chinese stock market, and include themes such as private enterprise return, overseas expansion, AI, anti-involution, and shareholder returns [5]. Group 4: Launch of the "15th Five-Year Plan" Investment Portfolio - Goldman Sachs has selected 50 mid-cap stocks (30 A-shares and 20 overseas-listed Chinese stocks) based on growth, valuation, and quality criteria [8]. - This selected portfolio has achieved a total return of 68% over the past year, compared to 35% for the MSCI China Index, with a dynamic P/E ratio of 26 times and a dynamic PEG of 1.0 [8]. - Market consensus predicts that the portfolio will have an average annual compound growth rate of 30% in earnings per share over the next two years [8].

Core Viewpoint - Goldman Sachs has adjusted its GDP growth forecasts for China, reflecting an optimistic outlook based on government spending and export growth, with a focus on achieving the economic goals set for the 14th Five-Year Plan [5][8]. Economic Growth Forecasts - The actual GDP growth forecast for 2025 has been raised from 4.9% to 5.0%, while forecasts for 2026 and 2027 have been increased from 4.3% and 4.0% to 4.8% and 4.7% respectively, primarily due to an upward revision in export growth predictions [5][8]. - The expectation is that China's exports will grow by 5-6% annually over the next few years, outpacing global trade growth and contributing to overall economic expansion [8]. Export Growth Insights - Despite challenges such as increased tariffs from the U.S., China's actual exports are projected to achieve an annual growth rate of approximately 8%, driven by the competitiveness of Chinese products across various sectors [7][8]. - The "14th Five-Year Plan" emphasizes upgrading traditional industries and fostering emerging sectors, which is expected to support continued rapid growth in exports and an increase in global market share [7]. Real Estate Market Impact - The negative impact of the real estate market on GDP growth is expected to gradually diminish, with the drag on GDP growth estimated at around 2 percentage points annually for 2024 and 2025, potentially decreasing by about 0.5 percentage points each year thereafter [9]. - Recent data indicates a significant decline in new construction starts, with a 20% month-on-month drop in October, and a 30% decrease in second-hand housing prices since their peak in 2021 [9][10]. Policy Measures for Real Estate Stabilization - Potential policy measures to stabilize the real estate market include removing purchase restrictions, lowering down payment ratios, and providing subsidies for first-time homebuyers [9][11]. - Strategies to reduce excess inventory and support distressed borrowers are also suggested, including converting vacant properties for other uses and providing financial assistance to homeowners facing difficulties [10][11]. Consumer Spending Trends - There are early signs of recovery in the high-end retail market, with a shift in household savings from fixed deposits to more liquid forms, indicating an improvement in risk appetite [12]. - The process of increasing consumer spending as a share of GDP is expected to be gradual, requiring time to identify effective policy tools [12][13]. Future Policy Directions - The Chinese government is anticipated to implement more accommodative policies in the coming months, with a focus on stimulating domestic demand and addressing challenges in the real estate sector [14]. - Expected measures include a potential interest rate cut of 20 basis points and an increase in the fiscal deficit-to-GDP ratio from 12.0% in 2025 to 13.0% in 2026 [14].

Group 1 - Goldman Sachs promotes a new batch of Managing Directors every two years, with 638 new appointments announced for 2025, of which 78 are from the Asia-Pacific region, accounting for 12% of all new Managing Directors [1] - Among the new Managing Directors, 36 are based in mainland China or Hong Kong [1] - The new appointees graduated from over 395 universities, with nearly half holding master's degrees or higher, and about one-third joined Goldman Sachs through campus recruitment [1][6] Group 2 - The average tenure of the new Managing Directors at Goldman Sachs is 12 years, and they collectively hold citizenship from 54 countries or regions and can speak 53 languages [1][6] - 29% of the new Managing Directors have experience working in multiple departments within Goldman Sachs, while 17% have worked in different regions [1][5]