Goldman Sachs CEO is optimistic about 2026

Goldman Sachs Chairman and CEO David Solomon shared a broadly optimistic outlook for the global economy in 2026, citing a “constructive” macro environment driven by AI infrastructure investment, regulatory shifts, and continued fiscal stimulus, he said on the Exchanges podcast (listen, runtime: 22:08). Despite lingering geopolitical “noise” and a fragile US labor market, Solomon anticipates a potentially record-breaking year for M&As and a strong IPO pipeline.

What to expect

M&A set to accelerate in 2026: This year’s M&A activity could surpass the strong levels seen in 2025, Solomon said, calling 2026 potentially “one of the best M&A years ever.” Drawing on Goldman Sachs’ transaction backlog and client engagement, he said corporate sentiment remains solid, with transaction flow likely to continue, barring major external surprises. The shift to a more permissive regulatory tone has also helped encourage dealmaking after years of rejections.

The outlook for IPOs is also improving, fueled by stronger private equity activity and portfolio valuations that are aligning more closely with the market, Solomon said. He noted that some large private companies that previously delayed listings are now reconsidering going public. While issuance is unlikely to reach the 2021 peak, he expects IPO activity to continue the steady recovery seen in 2025.

Behind the scenes

Policy support and AI investment underpin growth: The global macro environment remains supportive for markets and risk assets heading into 2026, particularly in the US, Solomon argues. He pointed to a combination of sustained fiscal stimulus, monetary easing following 100 basis points of rate cuts in 2025, a more business-friendly regulatory environment, and a major capital investment boom driven by AI infrastructure.

Risks on the horizon: Solomon cautioned that policy uncertainty from Washington and global geopolitical tensions remain the main risks, citing a “shotgun approach” that unsettles business leaders. He pointed to recent headlines on Greenland and European tariffs as potential triggers for market pullbacks. Still, the outlook remains positive barring a major exogenous shock (like a pandemic or a major cyber incident), highlighting technology-driven productivity gains as a key support for investors.

Zooming out

The gap is widening between the US, Europe, and China. The US benefits from a strong “innovation economy” and efficient capital markets, Solomon argued, with a USD 30 tn economy and 2% trend growth. Europe, by contrast, is a USD 20 tn economy of 450 mn people with sub-1% growth and slow progress on reforms, with only 11% of the Draghi plan for economic reform implemented. In China, equity markets rose 60-80% over the past year, but the underlying economy remains sluggish despite eased US tensions.

MARKETS THIS MORNING-

The mood hasn’t shifted all week long — the anticipation of a wave of Big Tech earnings and the Fed’s rate decision are giving investors reason to stay optimistic. Asia-Pacific markets are mostly in the green in early trading this morning, with the Kospi leading gains.

THE CLOSING BELL-

The EGX30 rose 0.7% at yesterday’s close on turnover of EGP 6.8 bn (23.1% above the 90-day average). International investors were the sole net buyers. The index is up 14.4% YTD.

In the green: Abu Qir Fertilizers (+6.8%), ADIB (+5.1%), and EFG Holding (+4.4%).

In the red: Madinet Masr (-2.7%), Eastern Company (-2.6%), and Egypt Aluminum (-2.4%).