For today’s research, here are some macro estimates and expectations from Goldman Sachs (GS).
With a divided U.S. Congress, we’re unlikely to see substantial spending increases apart from fiscal stimulus.
- More likely to get a smaller fiscal stimulus package around $1 trillion (5% of GDP), much less than the $2.5 trillion that was expected with a Blue Sweep
- More likely to see a “placeholder” stimulus package before December 11th that might include enhanced unemployment and small business support
- Unlikely to see substantial individual or corporate tax increases in the near term
Goldman’s working assumption is that we get an FDA-approved vaccine by the end of 2020 and that enough people will take it to achieve herd immunity by Summer 2021.
- This seems plausible to me but might be a tad aggressive in terms of timing.
Goldman Sachs estimates higher global growth than the rest of Wall Street.
- Global 2021 GDP growth of 6.0% versus consensus estimates of 4.6%
- Global 2022 GDP growth of 5.2% versus consensus estimates of 3.7%
- GDP boost from a vaccine in 2021 estimated to be around 2.0%
- China’s output is mostly back to normal, so China’s growth is more limited from here.
They are tempered by their concerns concerned about the Covid-19 resurgence.
- In response to significant spikes in Covid-19 cases, we’re seeing Europe enforce lockdowns, and so far mobility is down about 1/4 as much as it was in March.
Goldman Sachs expects neither changes to interest rates nor high inflation rates (expecting under 2.0% inflation).
- There is still significant “slack” in the economy.
All-in-all, I don’t necessarily find a reason to disagree with these forecasts but generally think the return-from-home will be a gradual grind over 2021.