Newsletter Subject

What's Next for Investors...Tax Reform Impact on M&A, Financing...Auto Industry's Massive Transformation

From

gs.com

Email Address

briefings@subscriptions.gs.com

Sent On

Mon, Jan 22, 2018 08:01 PM

Email Preheader Text

Insights on markets, industries and the global economy January 22, 2018 Steady as She Goes: Staying

Insights on markets, industries and the global economy [Goldman Sachs]( [BRIEFINGS] January 22, 2018 (Un)Steady as She Goes: Staying Invested But Alert to Rising Risks The US economy is on track for another year of growth in 2018, albeit within an increasingly uncertain and unsteady political and geopolitical setting. In the Goldman Sachs Investment Strategy Group's (ISG) recent publication, Outlook 2018: (Un)Steady as She Goes, ISG Chief Investment Officer Sharmin Mossavar-Rahmani and the team explain why they expect solid economic and financial market fundamentals to continue to support a steady and broad-based global recovery in the year ahead. But they also caution that the benefits of economic growth must be weighed against political and other risks, including escalated tensions between the US and North Korea, a complex US-China relationship, and the rise of cyberattacks around the world. "Forecasting is difficult under the best of circumstances but particularly so after a nearly nine-year-long economic expansion and bull market," according to the authors. "2018 brings the additional challenges of even higher valuations and a stronger undertow of political and geopolitical risks." [Read report]( SHARE: [twitter]( [facebook]( [LinkedIn]( [email](mailto:?subject=(Un)Steady%20as%20She%20Goes%3a%20Staying%20Invested%20But%20Alert%20to%20Rising%20Risks&body=http%3a%2f%2fwww.goldmansachs.com%2fwhat-we-do%2finvestment-management%2fprivate-wealth-management%2fintellectual-capital%2funsteady-as-she-goes%2f) Talks at GS: Lessons in Leadership and Overcoming Adversity Above (L to R): Michael Carr of Goldman Sachs and Carlos Ghosn of the Renault-Nissan-Mitsubishi Alliance The automotive industry is undergoing a massive transformation driven by technological advances, changing consumer preferences, evolving policies and regulations and other trends. Carlos Ghosn, chairman and CEO of the Renault-Nissan-Mitsubishi Alliance and a longtime leader in the automotive industry, says the product of all that disruption is almost here: "The car you'll be driving ten years down the road has nothing to do with the car you're driving today." During a recent Talks at GS session moderated by Michael Carr of Goldman Sachs' Investment Banking Division, Ghosn also shared his views on the challenges that business and political leaders face in a world that is increasingly complex, integrated and global. "We need to defend globalization, not as an ideology, but [as a] very pragmatic way to say, What are the advantages that globalization is bringing?" [Watch video]( SHARE: [twitter]( [facebook]( [LinkedIn]( [email](mailto:?subject=Talks%20at%20GS%3a%20Lessons%20in%20Leadership%20and%20Overcoming%20Adversity&body=http%3a%2f%2fwww.goldmansachs.com%2four-thinking%2ftalks-at-gs%2fcarlos-ghosn.html) Goldman Sachs: 3 Key Takeaways for Investors Above: Heather Kennedy Miner of Goldman Sachs Against an improving macroeconomic environment, Goldman Sachs is in "growth mode" and focused on the year ahead, says Heather Kennedy Miner, global head of Investor Relations, who outlined three key takeaways from Goldman Sachs' 2017 fourth-quarter and annual results, announced last week. "Momentum is really on our side," says Miner. "The tax change is stimulating client dialogue." After delivering revenue growth and positive operating leverage in 2017, the firm is "executing tirelessly against [our] $5 billion in growth initiatives." [Watch video]( [Review results]( SHARE: [twitter]( [facebook]( [LinkedIn]( [email](mailto:?subject=Goldman%20Sachs%3a%203%20Key%20Takeaways%20for%20Investors&body=http%3a%2f%2fwww.goldmansachs.com%2finvestor-relations%2fpresentations%2f2018-1-17-q4-results-video%2findex.html) Briefly...on the US Tax Law's Impact on Corporate America The new US tax law is expected to benefit businesses across America. Goldman Sachs' Susie Scher, co-head of the Americas Financing Group in the Investment Banking Division, explains the implications and opportunities for corporate America. The federal law lowers the corporate tax rate to 21% from 35% and, at the same time, puts a minimum tax on profits overseas, spurring some companies to repatriate "trapped" offshore cash to the US. What sectors of the economy are most affected? Susie Scher: The impact on businesses will vary by sector and the tax profiles of the underlying businesses. Many domestically based companies will benefit from higher free cash flow associated with the reduction in the tax rate while US multinationals will get greater access to existing and future offshore earnings and cash flow. The technology sector holds a significant amount of cash overseas, followed by large-cap pharmaceuticals and biotech firms, and mid-cap industrials and consumer products companies. Just last week, for example, Apple said it anticipates repatriation tax payments of approximately $38 billion and will ramp up spending in US jobs and capital spending. How are companies thinking about using the excess cash? SS: There's currently a debate around capital allocation, but some generalities can be made. For companies that have not been capital constrained, their additional cash from tax reform will provide more flexibility for strategic investments or returning capital to shareholders. The decision between the two will be dependent upon the opportunities in the near to medium term. Some opportunities will arise because of the new lower corporate capital gain tax which we expect will result in more companies deciding to sell non-core businesses. For other companies who have been capital constrained, we expect that many of them will strengthen their balance sheets. How are companies thinking about the limitation on the deductibility of interest expense? SS: Deducting interest expense has been a centerpiece of many companies' financing strategy for decades. The new tax law does impose some limits on the amount of debt that can be deducted -- interest expense of up to 30% of earnings before interest, taxes, depreciation and amortization is deductible through 2021. But practically, most large-cap investment grade companies aren't likely to be affected as their debt holdings are below that threshold. However, we could see certain high-yield issuers affected, in particular, starting in 2022, when deductibility of corporate debt becomes more restrictive. So you could see some slight reduction of debt in the near term because of tax reform broadly writ, but we're not predicting a huge drop in issuance. For those companies that could be affected by potentially higher financing costs, are there any attractive alternatives? SS: We expect that companies will evaluate their capital structures and look for opportunities to employ lower-cost financing structures, such as floating-rate debt and convertible bonds. Take, for example, a convertible bond, which is an interest-bearing bond that can convert into equity at a future date; in return, the bond has a lower coupon than plain-vanilla debt. Under the old tax law, a company that issued a bond with a 5% coupon would have typically paid the equivalent of 3% after taxes. Under the new tax rules, the after-tax cost would now be closer to 4% and some companies may actually have to pay the full 5% if they are above certain limits on interest deductibility. In such cases, those companies may opt for convertibles bonds as a financing alternative in part because the bonds' lower interest expense would translate into higher earnings per share. If I'm a CEO and considering financing in the bond market, I may be willing to give up some stock price appreciation, and I'd opt for a low coupon convertible bond, especially at today's equity valuations. Goldman Sachs Media Highlights CNBC - January 19 [Goldman Sachs' Jan Hatzius on the Government Shutdown, Tax Reform]( (3:57) Reuters - January 19 [En Route to Davos, Macron Makes Versailles the Place to Be]( Sky News - January 18 [Goldman Sachs' Andrew Wilson on the US Economy and GSAM's Assessment of Trump's First Year in Office]( (2:10) Institutional Investor - January 18 [Goldman Sachs' Investment Management Wins]( [Subscribe]( The data provided in this newsletter is for information purposes only and should not be construed as investment or tax advice nor as a recommendation to buy, sell, or hold any particular security. Goldman Sachs believes the data in this newsletter is accurate, but does not verify its accuracy independently and does not warrant or guarantee that it is accurate or complete. Goldman Sachs has no obligation to provide any updates or changes to the data. No investment decisions should be made using this data. To the extent this newsletter includes material from the Goldman Sachs Securities Division, please click [here]( for information relating to Securities Division material and your reliance on it. [My Profile]( | [Unsubscribe]( © 2018 Goldman Sachs, All rights reserved. 200 West Street, New York, NY 10282, USA [GS.com]( | [Careers Blog]( | [Privacy and Security]( | [Terms of Use]( [Facebook]( [Twitter]( [LinkedIn]( [YouTube](

Marketing emails from gs.com

View More
Sent On

27/09/2024

Sent On

20/09/2024

Sent On

13/09/2024

Sent On

06/09/2024

Sent On

20/08/2024

Sent On

16/08/2024

Email Content Statistics

Subscribe Now

Subject Line Length

Data shows that subject lines with 6 to 10 words generated 21 percent higher open rate.

Subscribe Now

Average in this category

Subscribe Now

Number of Words

The more words in the content, the more time the user will need to spend reading. Get straight to the point with catchy short phrases and interesting photos and graphics.

Subscribe Now

Average in this category

Subscribe Now

Number of Images

More images or large images might cause the email to load slower. Aim for a balance of words and images.

Subscribe Now

Average in this category

Subscribe Now

Time to Read

Longer reading time requires more attention and patience from users. Aim for short phrases and catchy keywords.

Subscribe Now

Average in this category

Subscribe Now

Predicted open rate

Subscribe Now

Spam Score

Spam score is determined by a large number of checks performed on the content of the email. For the best delivery results, it is advised to lower your spam score as much as possible.

Subscribe Now

Flesch reading score

Flesch reading score measures how complex a text is. The lower the score, the more difficult the text is to read. The Flesch readability score uses the average length of your sentences (measured by the number of words) and the average number of syllables per word in an equation to calculate the reading ease. Text with a very high Flesch reading ease score (about 100) is straightforward and easy to read, with short sentences and no words of more than two syllables. Usually, a reading ease score of 60-70 is considered acceptable/normal for web copy.

Subscribe Now

Technologies

What powers this email? Every email we receive is parsed to determine the sending ESP and any additional email technologies used.

Subscribe Now

Email Size (not include images)

Font Used

No. Font Name
Subscribe Now

Copyright © 2019–2025 SimilarMail.