Talks at GS with Hamilton's Leslie Odom Jr....Next Phase of Corporate Strategy...COVID-19 and College Admissions

[Goldman Sachs]( [BRIEFINGS] July 8, 2020 Talks at GS With Hamilton’s Leslie Odom Jr. Above (L to R): Actor and singer Leslie Odom Jr. and Meena Flynn of Goldman Sachs The film version of Hamilton may not have gotten the theatrical release that its producers initially intended, but for Leslie Odom Jr., who famously brought the character of Aaron Burr to life in the original Broadway musical, the recent release of the film on the streaming service Disney Plus comes at a critical time for audiences. “We get to stand in the gap right now for theater,” Odom said during a recent episode of Talks at GS. “Hamilton means a lot to a lot of people, not just us. We get to give people that at a really trying time.” The diverse casting of Hamilton is particularly resonant now as people grapple with difficult issues around race and inequality, Odom said. “There are people that don’t know any black people really personally...there’s not a close black friend that they would consider a trusted advisor or someone that they could bounce things off of, or someone who they might have an interaction with who could make them think of something different...And so, sometimes we're those people for them,” explained Odom. “It's a powerful thing that those are the images coming into their homes, and I certainly am very proud of that representation.” [Watch video]( SHARE: [twitter]( [facebook]( [LinkedIn]( [email](mailto:?subject=Talks%20at%20GS%20With%20Hamilton%E2%80%99s%20Leslie%20Odom%20Jr.&body=https%3A%2F%2Fwww.goldmansachs.com%2Finsights%2Fseries%2Ftalks-at-gs%2Findex.html) The Daily Check-In With Goldman Sachs As we move into the second half of 2020, [Gregg Lemkau]( co-head of Goldman Sachs’ Investment Banking Division, expects a significant pick-up in corporate strategic activity, particularly in sectors like technology and healthcare. “Deal activity has been incredibly low during this period of volatility but there's pent-up demand,” Lemkau said during a recent episode of [The Daily Check-In with Goldman Sachs](. “There is substantial capital on the sidelines and there are industries in real need of consolidation, so nearly every conversation we're having now with our clients is once again focused on strategic activity.” Lemkau also underscored recent corporate efforts around issues related to social progress. “After decades of driving companies to maximize shareholder value as the key focus, there’s been a bit of a pivot towards trying to understand social purpose,” he said. “It’s been a really interesting moment for CEOs and for companies, that they seem to be seizing. And while I'm quite sure capitalism will endure, there does seem to be a slight pivot away from the shareholder value primacy we’ve seen to include at least a degree of social purpose and hopefully that'll be a lasting impact in this period." In other episodes of The Daily Check-In, Goldman Sachs Chief Economist [Jan Hatzius]( explored the link between wearing face masks and coronavirus outcomes, and the economic value of a national face mask mandate in reducing the need for broad lockdowns (if you want to dive in, we’ve also made his report on the topic available [here](. From Goldman Sachs Asset Management, [Greg Tuorto]( of the Fundamental Equity team discussed small-cap stock performance since the market rally, while [Basak Yavuz]( of Emerging Markets Equities shared insights on increased investor optimism around emerging markets. For more Daily Check-In videos, [subscribe to our channel]( on YouTube. [Watch videos]( SHARE: [twitter]( [facebook]( [LinkedIn]( [email](mailto:?subject=The%20Daily%20Check-In%20With%20Goldman%20Sachs&body=https%3A%2F%2Fwww.goldmansachs.com%2Finsights%2Fseries%2Fthe-daily-check-in%2Findex.html) July QuickPoll: Sentiment Improves as Markets Reach Equilibrium Despite a resurgence in COVID-19 cases in the US, overall market sentiment improved marginally in the beginning of July to more neutral levels (46% bearish versus 40% bullish), according to the latest Marquee QuickPoll survey of approximately 1,300 Goldman Sachs institutional investor clients. Here are highlights from this month’s poll: A new equilibrium and lower volatility. Overall markets have found a new equilibrium, which should lead to lower volatility across markets, said Oscar Ostlund, who oversees the QuickPoll and is head of New York Market Strats in the Global Markets Division. “The lingering first wave of virus infections in the US is viewed by investors as a short-term headwind to the economy, but that is offset by the successful re-opening and rebound in Europe,” he said. Going long. Investors are increasingly comfortable going long and holding assets—such as credit and developed market equities— as bears have increasingly given up on their views. Conversely, more investors said they expect the US dollar to fall in the coming months. In fact, the strongest conviction in the market remains the short US dollar trade. Rotation to Europe but not to cyclicals. Of the two rotations that emerged in the June QuickPoll, one (the rotation from defensive to cyclical sectors) seems to have lost some steam, while the other (a rotation to European assets and equities in particular) is gaining traction, in particular among European investors. For more information about QuickPoll and Marquee, [reach out to the team](mailto:gs-marquee-sales@ny.email.gs.com?subject=Briefings%20Follow-Up%3A%20Interested%20in%20Learning%20More%20About%20Marquee&body=Briefings%20follow-up%3A%20I%20am%20interested%20in%20learning%20more%20about%20Marquee.). SHARE: [twitter]( [facebook]( [LinkedIn]( [email](mailto:?subject=July%20QuickPoll&body=) Podcast: Why Investors Are Continuing to Allocate Capital to Alternatives The pandemic isn’t derailing the long-term momentum behind alternative capital markets, says Kristin Olson, global head of Alternative Capital Markets in Goldman Sachs’ Consumer and Investment Management Division. Alternative asset classes—private equity, private real estate, private credit, and hedge funds, primarily—continue to attract investor interest, Olson said on the latest Exchanges at Goldman Sachs podcast. “I think the result post-COVID is, in the short term, we might see a bit of a pause as investors do this diagnostic on their current exposures, but so far we have not seen a falloff of interest in alternatives, and investors continue to make new commitments at a pre-COVID pace.” One pocket Olson points to as demonstrating meaningful growth is private credit, which offers investors alpha even against a low-rate environment. “The opportunity to generate a mid- to high single-digit yield in private credit that can approach low double-digit returns if you add a little bit of leverage has been quite compelling,” Olson said. Listen to the podcast on [Apple Podcasts]( or [YouTube](. SHARE: [twitter]( [facebook]( [LinkedIn]( [email](mailto:?subject=Podcast&body=) Briefly...on How COVID-19 Is Impacting the College Application Process Just as the pandemic has accelerated a shift to online learning, it is also reshaping the college application process. On a recent client webcast, Goldman Sachs’ John Mallory, who leads the firm’s Americas Private Wealth Management business, spoke with Amy Alexander and Sai Samboon of Bright Horizons College Coach about the trends shaping the college admissions process. John Mallory: The pandemic has affected numerous aspects of higher education, from in-person classes and university endowments, to the college admissions cycle. Amy and Sai, given your experience working with colleges and families, what are some of notable changes you’re seeing in the application process? Amy Alexander: One of the biggest changes we’re seeing now is in the area of standardized testing. Nearly every day, another university is announcing a move to a test-optional policy, meaning that scores from college entrance exams, such as the SAT or ACT, are not required for admission. While some schools have suspended exam requirements for the duration of the pandemic, others are taking a longer-term approach. Tufts University, for example, has said it was going test optional for the next three years. Students should still do their research to determine each's school testing requirements since there is so much differentiation and school policies are changing weekly—even daily. As a practical matter, we would recommend that students try to take the SAT or ACT—register, prepare and assume the test will still be required by some colleges—and prioritize taking those exams over subject matter placement tests. If you’re truly not able to take them, colleges will understand, but great to do if you can. If you have strong test scores, you can still submit them. Sai Samboon: To give you a sense of how the move has accelerated, with more than 4,000 colleges in the US today, more than 1,000 of them are going test-optional or test-flexible. That means more than half of the top 100 liberal arts college are test optional. Universities could continue to soften their stance on testing, such as accepting results from later testing dates. Overall, universities are going to shift their emphasis to other elements of an applicant’s profile. John Mallory: One of the questions that we are hearing from clients—and that comes up in my own household as well—is what should kids being doing during the lockdown to build up their experiences when many traditional opportunities have been put on hold? Sai Samboon: For any student applying to college in the next few years, colleges will be putting a giant asterisk next to their experiences in the spring of 2020. Everyone is in the same boat and colleges understand that this situation is affecting all of us. At the same time, there are many ways for students to continue to do the things they love to do—and demonstrate their interest and progress in—even if they’re sheltering at home. Amy Alexander: While many in-person summer camps, pre-college programs, travel, internships, and sports training have been canceled, there are still enriching ways that teens can positively impact their community, grow academically and personally, and continue to thoughtfully prepare for college. For example, they can check out their local cultural, service and faith-based organizations to see if they can volunteer for service-related opportunities. At a time when many high schools are forgoing letter grades, students can strengthen their college application by taking a graded academic summer class. If your teen is interested in STEM activities, they can cook a dinner inspired by different science-based diets, or create a virtual science project for kids in the neighborhood. There are plenty of opportunities for those interested in the arts and culture as well, such as virtual museum tours, online lectures and virtual opportunities to practice a foreign language. And student athletes should work with their high school and club coaches to get home workouts and strategies for next season. John Mallory: How has the pandemic, with its economic impact and travel restrictions, affected the pool of college applicants? Sai Samboon: International students represent a significant percentage of the student population at US universities. Given the restrictions on travel and delays in processing student visas, many international students aren’t able to accept or have delayed their admission offers for this fall—and this is causing a huge domino effect. Facing tuition shortfalls, since many international students tend to pay full tuition, we’re seeing some colleges admit many more students off of their wait lists—and at a faster pace—than they have historically. Amy Alexander: The pandemic will also sharply compress the time that students have in the fall to apply for early decision or early action programs—which, depending on the school, are binding. We could see a difficult fall semester for many high school seniors because they will be rushing to get in their applications under tighter deadlines. In some cases, we could see more colleges offer early decision II options — which essentially allow students to wait until later in the admissions cycle to claim their allegiance to a particular school. And just last month, for example, Princeton University dropped its non-binding early action application deadline due to COVID-19 and will only offer one application deadline for the 2020-2021 cycle. John Mallory: One of the themes we’ve seen across a variety of industries is that the pandemic appears to have accelerated underlying trends. Are there any changes in college admissions that you think are likely to stay, and do you have any advice for managing through the uncertainty? Sai Samboon: Colleges have been moving toward virtual learning for some time—the pandemic has accelerated that trend. In the fall, it’s not clear what to expect. Many colleges have been moving toward a hybrid approach, with a mix of in-person and virtual classes, due in part to financial pressures and safety precautions. But given where we’re at with the virus, we could also see a completely virtual fall. I think it’s possible that students in the near future will be getting a full liberal arts education with more than half of it provided online. Amy Alexander: Since everything is so uncertain, it’s even more important to do one’s research—whether it’s about the school’s testing policy, application deadlines or even its financial health. Many small liberal arts college, for example, are largely dependent on tuition revenue and lack a large endowment. So, if they don’t have full-pay students returning in the fall, they’re going to be hurting. But because we’re often quick to react to the worse-case scenarios, I would advise students to just ‘stay on their own mats’ and keep doing what they would have already done. Some things are just out of our control. [Read more Briefly Q&As]( SHARE: [twitter]( [facebook]( [LinkedIn]( [email](mailto:?subject=Briefly...&body=https%3A%2F%2Fwww.goldmansachs.com%2Finsights%2Fseries%2Fbriefly%2Findex.html) Goldman Sachs Media Highlights Bloomberg - July 1 [Activist Campaigns Look for Second-Half Revival After Slow 2020]( Bloomberg - July 1 [Goldman’s Currie Still Bullish on Oil Into Next Year]( CNBC - June 30 [Goldman Sachs says a national mask mandate could slash infections and save economy from a 5% hit]( Reuters - June 30 [Goldman's investment bank to increase Black staff hiring, recruitment]( Bloomberg - June 29 [Goldman’s Philip Expects ‘Meaningful Pickup’ in M&A Later This Year]( (6:17) [Subscribe]( [Unsubscribe]( 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. 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