GS TWIG Notes This Week in Global Research

Equity Research 9 October 2026 | 12:57PM EDT

GS TWIG Notes: This Week in Global Research - October 9, 2026

Chris Hussey | Goldman Sachs & Co. LLC

Sarah Herr | Goldman Sachs & Co. LLC

macro issues we’re watching The changing complexion of Asia and EM investing as China, Korea, and others evolve and mature n Tim Moe highlights how Asia equity markets have become more liquid, more Tech-heavy (50% of market cap) and a place of more reliable, less macro-driven earnings growth in “Investing in a differentiated Asia.” We raise our 10-year EPS CAGR forecast by 100bp to 10% as we now see a sustained strong and long Tech hardware cycle. And Sunil Koul highlights 4 ways to invest amidst heightened (but likely soon to diminish) stock concentration in EM in “EM : Concentration Conundrum.” In addition to being overweight North Asia and Tech, lean into: (1) Brazil, South Africa, Greece, and Hungary; (2) high dividend yield stocks; (3) equal-weighted or cap-weighted EM indices; and (4) derivatives to hedge macro and concentration risks. n What about China? Hui Shan and Goohoon Kwan believe that the runway remains clear for China exports to continue to growth fast, even as they now have exceeded the peaks we saw from Germany in the 1970s and Japan in the 1980s in “How Much More Can China’s Exports Grow?” Key to watch: can China’s trading partners grow fast enough to maintain demand?

Seeking out the canary in the coal mine: Europe’s sovereign stress, Credit, and US rate pressures n Europe. In Europe, tightening financial conditions from widening French 10-year bond spreads (and spillovers to other countries) reduce the urgency for the ECB to hike rates writes Jari Stehn in “ECB: Potential Implications of Rising Sovereign Stress.” The fundamental sovereign risk problem is tied to fiscal issues, not monetary policy, but the ECB could implement programs to stabilize bond markets should “disorderly market dynamics” emerge. As for the Euro, while near-term risks of continued stress and contagion remain high, we think current

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credit-based pressures on the Euro are likely nearing their limit writes Stuart Jenkins in “Sovereign Spreads and the Euro – Contagion is Key.” Key to watch: if the ECB cuts while the Fed hikes. See also Alexandre Stott’s “France: What We Learned from Rassemblement National’s Recent Economic Proposals.” And for equities, Sharon Bell sees an earnings growth-driven path to further upside even amidst rising rates and sovereign debt uncertainty in “Strategy: Growth is good, but Rates bite.” n Credit. A potential increase in rates volatility could decrease the demand for both IG and HY credit, pressuring spreads wider writes Amanda Lynam in “Macro Credit Views: The Big Three—Rates, Supply and Dispersion.” Key to watch: if growth remains firm, credit markets can absorb higher rates (in fact, higher rates may even attract some investors). But if other factors like sovereign risk or inflation cause rates to move higher, Credit could be pressured. n US rates. If current high Treasury yields persist (and don’t decline as we forecast), we estimate the drag on GDP growth could be slightly over 0.5pp writes Pierfrancesco Mei in “How Will Higher Rates Affect the US Economy?” See also: “USA: FOMC Minutes Note ‘Most’ Participants Saw Another Increase as Likely ‘Appropriate by Year End,’ but Committee Will Approach Upcoming Meetings with an ‘Open Mind’.”

Focus on: earnings season, AI, and Brazil’s elections n Ben Snider expects most companies to beat consensus estimates (27% yoy EPS growth for the S&P 500) as he discusses in last Friday’s note, “Q3 2026 earnings season preview.” Focus on: AI monetization and productivity…