Investment Rating - The report indicates a positive outlook for the stock market, suggesting that the "Santa Rally" is expected to occur this year [18]. Core Insights - The report emphasizes that the recent market fluctuations are viewed as adjustments rather than a significant downturn, with capital flows remaining positive for the U.S. stock market [1][3]. - Strong seasonal trends and robust capital inflows, along with a persistent retail demand, are expected to support a market rebound by year-end [2][24]. - Historical data suggests that narrow market breadth, while concerning, has often preceded positive returns in the medium to long term [4][6]. Summary by Sections Market Breadth - The S&P market breadth remains narrow, over one standard deviation below the average, but has shown slight improvement, supporting the rationale for strategic rotation rather than structural market concerns [4][6]. Capital Flows - Global equity funds saw significant net inflows of $29 billion, with U.S. equity funds driven entirely by domestic demand, particularly in technology sectors [13]. Risk Appetite - Despite a slight cooling in market sentiment, the risk appetite indicator remains at the one-year average level, indicating that the recent sell-off does not reflect a significant decline in risk appetite [11]. Buybacks - Approximately 90% of S&P 500 companies are currently in their buyback window, with expectations of significant buyback activity leading up to the end of the year [20][23]. Retail Demand - Retail demand remains exceptionally strong, with equities representing the highest allocation in investor portfolios at 52%, suggesting continued positive performance in the stock market [24]. Historical Performance - Historical trends indicate that when the S&P 500 experiences a decline in the first week of November after a strong performance, the average return by December 31 is typically positive [35].

Investment Rating - The report upgrades India's stock market rating to "Overweight" (OW) due to supportive economic growth policies, earnings recovery, and reasonable valuations [24]. Core Insights - The artificial intelligence cycle is still in its early stages, with institutional positions not fully allocated, and capital flows are expected to become favorable before year-end [5][6]. - The report suggests that the stock market has a potential upside of 5-10% before the end of the year, driven by broad market participation [6]. - Concerns about credit markets are impacting alternative asset management stocks, particularly those with significant private credit exposure, but the overall impact on the credit market remains limited [21]. - The report highlights the significant investment opportunities in the electricity and water sectors due to increasing demand and aging infrastructure [18]. Summary by Sections Market Trends - The report notes that the current market volatility is typical for this time of year, rather than abnormal [1][19]. - There is a comparison of the current NDX with past technology bubbles, indicating that while some characteristics are similar, the current valuations are still below historical peaks [10][11]. Economic Indicators - The report estimates that AI investments will create $20 trillion in GDP economic value, with $8 trillion flowing into U.S. companies as capital income [13]. - The labor market is showing signs of weakness, with expectations of potential salary cuts in December [31]. Emerging Markets - India's stock market has underperformed compared to other emerging markets, but recent trends suggest a potential recovery driven by earnings and foreign investment [23][24]. - The report indicates that emerging markets have seen strong performance overall, with a 30% increase this year, while India's market has only seen a 3% increase [23]. Consumer Behavior - There are signs of cracks in the U.S. consumer market, with hedge funds reducing their holdings in consumer service stocks to a five-year low [26]. - The report discusses the impact of inflation and economic conditions on different income groups, suggesting a mixed outlook for consumer spending [28][29].

Investment Rating - The report indicates an upgrade in GDP growth forecasts for China, suggesting a positive outlook for the region [4][5]. Core Insights - The report highlights that Goldman Sachs' forecasts for China's real GDP growth are now significantly above consensus for 2025 and 2026, driven by a manufacturing push [4][5]. - The Financial Conditions Index (FCI) has shown a slight increase, indicating a marginal improvement in financial conditions globally [9][30]. - The Current Activity Indicator (CAI) for China stands at +5.8% for September, reflecting strong economic activity [54]. Summary by Sections GDP Forecast Changes - The report details changes in GDP forecasts across various regions, with notable increases for Taiwan (+1.9 percentage points) and Turkey (+1.2 percentage points) [6][12][104]. - The global GDP forecast has been adjusted upwards, reflecting a more optimistic economic outlook [103][104]. Financial Conditions - The Global ex Russia FCI rose by +0.5 basis points over the week, indicating a slight easing of financial conditions [9][30]. - The report provides insights into the implications of financial conditions on real GDP growth, suggesting a positive correlation [45][46]. Current Activity Indicators - The CAI for developed markets is reported at +1.5% for October, while emerging markets show a stronger performance at +4.5% [54][56]. - The CAI for the US is +2.1%, indicating robust economic activity [54]. Wage and Price Inflation - Wage trackers indicate varying trends across different countries, with the US showing a composition-adjusted increase in wage growth [22][73]. - Inflation measures, including trimmed core inflation, are discussed, with implications for future monetary policy [68][69]. Fiscal Policy Impacts - The report analyzes the effects of fiscal policy on real GDP growth, with specific attention to the US and Euro Area [84][89]. - It highlights the expected fiscal impulses over the next four quarters, indicating potential growth drivers [87][88].

Investment Rating - The report indicates a high overall market risk, particularly during a de-risking period, with a focus on concentrated positions in data center stocks and a pessimistic sentiment towards consumer sectors [1][4][5]. Core Insights - The Federal Reserve's hawkish stance reflects internal divisions regarding the level of policy accommodation, contributing to market concerns about economic prospects despite a generally loose financial environment [2][3]. - Over two-thirds of companies reported earnings exceeding expectations by more than one standard deviation, yet their single-day performance lagged behind the S&P index, indicating high client positioning levels and a preference for AI-related stocks while shorting consumer-related stocks [1][3]. - The Supreme Court's deliberation on the AEBA tariff case could lead to a significant reduction in effective tariff rates, currently around 15%, if tariffs are deemed invalid, although the government may seek alternative methods to reimplement tariffs [1][4][6]. Summary by Sections Economic Outlook - Employment market data, including Challenger data, reveals concerns about the labor market, exacerbating fears about the economic outlook [1][2]. - The stock market's recent weakness is attributed to the Federal Reserve's hawkish position and worries over soft economic data, with a potential recovery contingent on the Fed acknowledging these data and taking stabilizing measures [2][11]. Market Sentiment - Despite a tightening of institutional investor positions, retail investors remain optimistic, with a potential trigger for CTA stop-loss levels [3]. - The current environment shows a significant interest in AI stocks while consumer stocks face downward pressure, leading to substantial corrections in popular retail and semiconductor stocks [3][5]. Tariff Implications - If the Supreme Court rules against the government regarding tariffs, the effective tariff rate could decrease by up to 7.5 percentage points, with the government likely to explore alternative measures for tariff implementation [4][6][7]. - The government may utilize temporary tariffs under Section 122 or initiate investigations under Section 301, which could prolong the process of implementing new tariffs [7][8]. Government Shutdown - The ongoing government shutdown, now lasting approximately 37 days, is tied to a standoff over Senate filibuster rules, with pressure mounting to resolve funding issues as critical deadlines approach [9][10]. - A resolution to the government shutdown is anticipated around mid-November, which could significantly impact consumer sentiment and market dynamics [10].

Investment Rating - The report assigns a "Buy" rating for Damai Entertainment Holdings (1060.HK) with a target price of HK$1.30, representing an upside of 38.3% from the current price of HK$0.94 [1][4][20]. Core Insights - Damai Entertainment announced a positive profit alert for 1HFY26, with net profit attributable to owners expected to be no less than Rmb500 million, which is at least 7% above the forecasted Rmb468 million, indicating a year-on-year growth of over 49% [1]. - The significant growth in net profit is attributed to strong year-on-year growth in the Alifish business and a reduction in investment losses [1]. - For the upcoming 1HFY26E results, total revenue is forecasted to be Rmb3.7 billion, reflecting a 20% year-on-year increase, driven by an 84% growth in the IP segment [2]. - The IP segment is expected to benefit from strong contributions from Sanrio China and newly onboarded IPs, which are anticipated to double the GMV for AliFish [2]. - Adjusted EBITA is projected to be Rmb525 million, representing a 9% year-on-year increase when excluding a one-off write-back of bad debt from the Film segment in 1HFY25 [3]. - Key areas to monitor include the growth momentum of the IP business, updates on the Damai ticketing business, and margin dynamics for Damai's international business investments [4]. Financial Projections - Revenue projections for Damai Entertainment are as follows: Rmb6,702.3 million for FY25, Rmb7,620.5 million for FY26E, Rmb9,049.0 million for FY27E, and Rmb10,308.6 million for FY28E [7]. - EBITDA is expected to grow from Rmb756.2 million in FY25 to Rmb1,842.0 million by FY28E [7]. - The report anticipates a significant increase in EPS from Rmb0.02 in FY26E to Rmb0.05 in FY28E [7]. - The company is projected to achieve a net income margin of 14.2% by FY28E, up from 5.4% in FY25 [17].

Investment Rating - The report indicates that the investment rating for the industry is positive, with forecasts for GDP growth in China significantly above consensus for 2025 and 2026 [4][5]. Core Insights - The report highlights an upward revision in GDP forecasts for China, driven by a strong manufacturing push, which is expected to enhance economic growth [5]. - The Global Financial Conditions Index (FCI) has shown a slight increase, indicating a more favorable financial environment for growth [9][32]. - Current Activity Indicators (CAI) for various regions, including China and India, reflect robust economic activity, with China reporting a CAI of +5.8% for September [54][56]. Summary by Sections GDP Forecast Changes - The report details changes in GDP forecasts for various regions, with notable increases for Taiwan (+1.9 percentage points) and Turkey (+1.2 percentage points) [6][12]. - The overall global GDP forecast has been adjusted positively, reflecting improved economic conditions across multiple countries [103][104]. Financial Conditions - The Global ex Russia FCI rose by +0.5 basis points over the week, suggesting a slight easing in financial conditions [9][32]. - The report provides insights into the implications of financial conditions on real GDP growth, indicating a positive correlation [45][46]. Current Activity Indicators - The CAI for the global economy stands at +2.7% for October, with developed markets at +1.5% and emerging markets at +4.5% [54][56]. - Specific countries like Spain and Australia show strong CAI values, indicating robust economic performance [54]. Wage and Price Inflation - Wage trackers indicate varying trends across different countries, with the US and Canada showing positive wage growth [73][75]. - The report discusses the impact of wage growth on inflation measures, highlighting the relationship between labor market conditions and price stability [21][22]. Fiscal Policy Impacts - The report analyzes the effects of fiscal policy on real GDP growth, with projections indicating a positive impact from expansionary fiscal measures in the US and other regions [84][89]. - It emphasizes the importance of fiscal impulses in shaping economic growth trajectories [87][90].

Investment Rating - The report indicates a positive outlook for the industry, with an upward adjustment in China's GDP forecast based on manufacturing investment growth expectations [1][5]. Core Insights - The easing of US-China trade tensions, including a 10% reduction in tariffs and postponement of certain regulations, is expected to mitigate trade friction in the short term, although long-term impacts remain uncertain [1][2]. - China's GDP forecast has been revised upward primarily due to anticipated growth in manufacturing investments, supported by the 15th Five-Year Plan's focus on advanced technology and manufacturing competitiveness [1][5]. - The Chinese government is likely to enhance monetary, fiscal, and credit policies to achieve an average growth target of 4.5% from 2026 to 2030, with a potential goal of around 5% set for 2026 [1][6]. Summary by Sections Trade Relations - Recent discussions between the US and Asian countries, particularly China, have led to a reduction in effective tariffs from over 100% to approximately 30%, with various port fees temporarily suspended [2]. - The trade agreements reached with Japan, South Korea, and Malaysia indicate a reduction in negative scenarios, although residual uncertainties remain [2]. Economic Growth Projections - The Asian economic growth outlook is moderate, with a shift from export-driven growth to reliance on domestic demand, necessitating more accommodative domestic policies [4]. - The low inflation levels in most countries provide room for monetary easing, with many expected to adopt such measures to support domestic demand growth [4]. Policy Adjustments - The Chinese government is expected to implement policies aimed at strengthening traditional industries and developing emerging sectors, focusing on both domestic consumption and international market expansion [3][10]. - The upcoming political meetings in December will be crucial for determining the direction of fiscal and monetary policies to support economic growth [12][13]. Currency Outlook - A moderate depreciation of the US dollar is anticipated due to potential Fed rate cuts and a significant fiscal deficit, while the Chinese yuan may experience gradual appreciation [3][9]. - The yuan's potential for appreciation is supported by its current undervaluation and the competitive nature of Chinese exports [9].

Investment Rating - The report does not explicitly provide an overall investment rating for the sectors discussed [2]. Core Insights - The technology sector experienced a positive month with the NDX closing near all-time highs, driven by AI-related themes and significant partnerships [3]. - Financials faced bearish narratives, particularly concerning regional bank credit and consumer credit, impacting investor sentiment [3]. - The healthcare sector saw improved sentiment due to drug pricing agreements and increased M&A activity, although some biopharma stocks reverted initial gains [3]. - Consumer sentiment has turned cautious, particularly in restaurants and grocery sectors, indicating potential slowdowns [3]. - Industrial stocks showed mixed performance, with data centers and AI-related companies gaining traction while materials underperformed [3]. - Energy sector discussions centered around negative oil views, with potential for volatility and price upside due to geopolitical factors [3]. - Utilities are focusing on EPS guidance updates, particularly related to data centers and power demand growth [3]. - Special situations saw increased M&A activity, with notable deals and strategic sponsor involvement [3]. Sector Summaries Technology - The sector saw a +5% increase in October, with AI themes driving performance [3]. - Key subsectors included Semiconductors (+11%) and Software, which remained flat [3]. Financials - The sector faced challenges with narratives around credit quality and consumer spending [3]. - Notable upcoming earnings reports from private credit firms are expected to provide insights [3]. Healthcare - The sector experienced a boost from drug pricing agreements and M&A activity, although some stocks faced volatility [3]. - Biotech sentiment improved following significant policy changes [8]. Consumer - Sentiment has shifted to a more guarded stance, particularly in restaurants and grocery sectors, indicating potential slowdowns [10]. - Upcoming earnings from major retailers will be critical to assess the impact of economic conditions [10]. Industrials - The sector showed modest gains, with data centers and AI-related stocks performing well [3]. - Concerns about inflation and earnings downgrades were noted in the materials subsector [3]. Energy - Investor sentiment remains cautious, with discussions around oil price volatility and geopolitical developments [3]. - The refining sector is experiencing mixed conversations regarding future expectations [3]. Utilities - Focus on EPS guidance updates and potential growth in power demand [3]. - M&A activity is expected to increase, with significant deals in the pipeline [3]. Special Situations - M&A activity surged in October, with notable deals and strategic sponsor involvement [3]. - The report highlights ongoing debates around valuations and potential acquisition targets [19].

Investment Rating - The report raises the 2025 real GDP growth forecast for China from 4.9% to 5.0% based on government spending acceleration and commitment to economic targets [6][10]. Core Insights - The report emphasizes the importance of China's manufacturing push in driving economic growth and highlights the expected annual growth of Chinese export volumes by 5-6% [9][10]. - It notes that the fiscal deficit is projected to widen by 1.0 percentage point of GDP in 2026, with total social financing stock growth expected to rise [9][10]. - The report discusses the ongoing focus on high-tech manufacturing and AI investment as a counterbalance to demographic and local government debt challenges [9][10]. Summary by Sections Current State of the Economy - The 2025 real GDP growth forecast has been raised to 5.0% due to increased government spending and commitment to economic targets [6]. 2026 Macro Views - The report anticipates a real GDP growth of 4.8% in 2026, which is significantly above market consensus [9]. - It expects the fiscal deficit to widen and further cuts in the reserve requirement ratio (RRR) and policy rates [9]. Medium- to Long-Term Views - Chinese export volumes are expected to grow by 5-6% annually, contributing to overall economic expansion [9]. - The report highlights the prioritization of manufacturing, technology, and security in China's 15th Five-Year Plan [9]. Economic Indicators - The report provides a detailed forecast of various economic indicators, including GDP growth, domestic demand, consumption, and inflation rates for the years 2025 to 2027 [13]. - It notes that household consumption is expected to grow at a rate of 4.6% in 2025, with government consumption at 4.0% [13]. Policy Measures - The report outlines several policy measures aimed at boosting consumption and investment, including a consumer goods trade-in program and increased government spending on infrastructure [81][82].

Jan Hatzius +1(212)902-0394 | jan.hatzius@gs.com Goldman Sachs & Co. LLC 30 October 2025 | 8:02AM EDT Economics Research GLOBAL ECONOMICS ANALYST AI Adoption Through the Eyes of GS Investment Bankers Joseph Briggs +1(212)902-2163 | joseph.briggs@gs.com Goldman Sachs & Co. LLC Sarah Dong +1(212)357-9741 | sarah.dong@gs.com Goldman Sachs & Co. LLC Megan Peters +44(20)7051-2058 | megan.l.peters@gs.com Goldman Sachs International Investors should consider this report as only a single factor in making their inve ...