Goldman Sachs' Kostin on US Earnings, Tariffs, Mid-Cap Stocks

The video discusses the potential 11% upside for the S&P 500, driven by earnings growth in 2025 and 2026. It highlights the impact of a strong dollar on earnings surprises and the challenges posed by high bond yields and inflation. The discussion also covers risks from potential tariffs and revenue exposure to China, particularly for mega-cap companies. The video suggests focusing on midcap stocks for better risk-reward opportunities, given their lower multiples and similar growth rates compared to large-cap stocks.

What is the expected growth rate for the S&P 500 index by 2025?

• 15%

• 5%

• 20%

• 11%

How does a strong dollar impact the earnings season?

• Doubles the earnings growth

• Has no effect

• Decreases the magnitude of surprises

• Increases positive surprises

What is a potential headwind for equities according to the second section?

• Increasing corporate taxes

• Stable interest rates

• Rising bond yields

• Decreasing inflation

What strategy is suggested for managing risks related to tariffs?

• Invest in companies with international sales

• Focus on companies with domestic revenue

• Increase holdings in technology stocks

• Diversify into European markets

What percentage of sales for the 'Magnificent 7' companies occurs outside the US?

• 25%

• 50%

• 100%

• 75%

Why are mid-cap stocks considered a better investment opportunity?

• They have higher multiples

• They offer similar growth rates at lower multiples

• They have higher dividend yields

• They are less volatile

What is the current interest level of US investors in reallocating to China?

• High interest

• Moderate interest

• Low interest

• No interest