In a timely rebuttal to bearish narratives, Goldman Sachs released an in-depth analysis yesterday, arguing that widespread concerns about the U.S. economy are overblown and setting the stage for further equity gains. The report, which dissects eight critical charts, counters fears of an imminent recession, frothy valuations, and overreliance on AI spending. Key takeaways for investors:

• No Recession on Horizon: Goldman highlights robust consumer spending and labor market strength, projecting GDP growth of 2.2% for 2026—above consensus estimates. Unemployment remains steady at 4.1%, and wage growth is moderating without sparking inflation spikes.
• Valuations Not a Bubble: While the S&P 500's forward P/E ratio sits at 21x, Goldman attributes this to earnings growth outpacing multiples, with corporate profits expected to rise 12% this year. Tech-heavy Nasdaq valuations look stretched, but diversified exposure across sectors mitigates risks.
• AI as Sustainable Driver, Not Hype: Echoing broader tech optimism, the firm notes AI investments are fueling productivity gains, not just speculation. Capital expenditures in semiconductors and cloud infrastructure are up 25% YoY, supporting long-term multiples.

Goldman’s base case: S&P 500 to 6,200 by year-end, a 10% upside from current levels.

This report could catalyze a broad market rally, particularly benefiting financials (GS up 1.2% pre-market) and tech leaders. Traders should monitor SPY and QQQ for breakout above yesterday's highs; any dip below 5,800 on the S&P could signal profit-taking.

Tesla Reclaims EV Dominance as Subsidies Fade—Rivals Face Headwinds

Tesla's U.S. EV market share surged to 55% in Q4 2025, per latest data from Cox Automotive, as federal incentives under the Inflation Reduction Act phase out post-2025. Without government support, legacy automakers like Ford and GM are struggling with higher production costs and slower scaling, leading to a 15% drop in their combined EV sales. Tesla's edge? Unmatched manufacturing efficiency at Gigafactories, with Model Y and Cybertruck volumes hitting record 1.2 million units annually.

• Investor Angle: TSLA shares are up 3% pre-market, trading near $420. This underscores Tesla's moat in a subsidy-free era, potentially pressing rivals—Ford (F) down 0.8%, GM (GM) flat. Watch for supply chain ripple effects; battery costs have fallen 20% YoY, but tariff risks under Trump could inflate inputs by 10-15%.
• Broader Market Tie-In: Reinforces EV adoption trends, with U.S. EV penetration now at 12% of new sales. Sector ETFs like DRIV could see inflows, but volatility looms if China trade tensions escalate.

AI Boom Gets Vindicated: Ben Horowitz Calls It Bigger Than the Internet

Venture capital heavyweight Ben Horowitz of Andreessen Horowitz doubled down on AI's transformative potential in a podcast appearance, dismissing bubble fears as misguided. He cited "record demand and adoption" as the real drivers behind soaring valuations—global AI spending hit $200 billion in 2025, per IDC estimates, with enterprise adoption up 40%. Horowitz compares AI to the internet's early days but on steroids, predicting it will reshape 30% of GDP within a decade.

• Trading Implications: This bolsters tech sentiment, with NVDA and MSFT up 1-2% pre-market. AI-themed ETFs (e.g., BOTZ) are in focus; however, Horowitz warns of short-term corrections if interest rates stay elevated. Investors: Consider dips in semiconductors as buy opportunities, targeting 20% upside in H1 2026.

Buffett's Cash Conundrum: $100B Ready to Deploy, But Opportunities Scarce

Berkshire Hathaway's Warren Buffett, in a rare CNBC interview aired this week, expressed frustration with the conglomerate's $277 billion cash pile, likening it to "oxygen—you need it to live, but it's no way to make money." He stated he'd "spend $100 billion this afternoon without blinking" if the right deals emerged, signaling dry powder for acquisitions in a market short on bargains.

• Market Impact: BRK.B steady pre-market, but this hints at M&A acceleration in industrials or consumer goods. With cash yields at just 4-5% via T-bills, Buffett's impatience could pressure valuations lower to unlock deals. Watch for ripple effects in deal-hungry sectors like energy and manufacturing.

Watchlist: Retail Woes and Policy Shifts

• Saks Global Files for Bankruptcy: The luxury retail powerhouse (Saks Fifth Avenue, Neiman Marcus, Bergdorf Goodman) entered Chapter 11 amid vendor payment struggles and softening high-end demand. Debt stands at $1.2 billion; restructuring could wipe 30-40% off creditor recoveries. Luxury ETFs (e.g., IDEF) down 0.5%; broader retail (XRT) vulnerable if consumer spending cools.
• Trump's Lending Overhaul: Proposals to cap credit card rates at 10-15% and limit student loans to $50K could redirect $200B+ in borrowing to private lenders, boosting fintechs like SoFi (SOFI +1%) but squeezing banks (JPM -0.3%). Monitor financials for volatility; policy details expected in Q1.
• Aviation Pressure from Delta's Boeing Bet: Delta's order for 25 Boeing 787-10s (valued at $4B+ list price) targets premium international routes, intensifying competition for United (UAL) and American (AAL), both down 1% pre-market. Boeing (BA) gains 0.7% on backlog boost, but delivery delays persist.
• Geopolitical Energy Note: Russia's Roszarubezhneft vows to retain Venezuelan oil assets despite U.S. military actions, maintaining output at 100K bpd. Oil (WTI) flat at $72; limited immediate supply disruption, but watch for escalation impacting Exxon (XOM) and Chevron (CVX).

Stay nimble—earnings season ramps up mid-week. Trade safe, and let's catch those green candles.