Rise of Retail Investing...David Solomon Interviews Intuit CEO...IPO SPAC-Tacle

[Goldman Sachs]( [BRIEFINGS] February 5, 2021 The Rise of Retail Investing and Its Market Implications Above (L to R): Raj Mahajan, John Marshall, Lizzie Reed and Greg Tuorto of Goldman Sachs With retail investors continuing to propel U.S. trading volumes to historic highs, we invited four leaders from across the firm to discuss the market implications on a special episode of Exchanges at Goldman Sachs. John Marshall of Goldman Sachs Research provided context on the recent surge, noting that while day traders represent less than 10% of the large brokers’ customers, they constitute more than half of their trades. “For the largest online brokers, the number of trades has tripled since 2019, but that has mainly been driven by a small portion of their customer base,” he says. For hedge fund managers, last week’s historic volume of activity around short covering raises the question of how the practice of shorting will evolve, notes Raj Mahajan, the firm’s global head of systematic trading. Meanwhile, equity investors may have to increasingly factor in retail participation as part of their valuation metrics, says Greg Tuorto, a portfolio manager in Goldman Sachs Asset Management. “It's going to be something that we're all going to be looking for...to make sure we understand what percentage of the flow, what percentage of the ownership—like we look for [in] any other company—is in the retail space.” Finally, Lizzie Reed of the Investment Banking Division notes that despite the recent volatility, “the equity markets remain supportive" of corporates evaluating issuance in this environment. [Listen to podcast]( [Learn more about retail investing]( SHARE: [twitter]( [facebook]( [LinkedIn]( [email](mailto:?subject=The%20Rise%20of%20Retail%20Investing%20and%20Its%20Market%20Implications&body=https%3A%2F%2Fyoutu.be%2F2IjzgcyySRo) Talks at GS With Intuit CEO Sasan Goodarzi Above (L to R): David Solomon of Goldman Sachs and Sasan Goodarzi of Intuit It is during times of crisis when companies should lean into making difficult, transformational changes, says Intuit CEO Sasan Goodarzi in a recent episode of Talks at GS with Goldman Sachs Chairman and CEO David Solomon. “It's easy in an environment like this to sort of put things to the side and say, well, we'll get to that later, that's too big of a transformation in a pandemic,” he explains. But “from a business perspective, I would tell you that [the pandemic] has taught me that it's times like this where you have to double down on a reinvention and really double down on being aggressive.” One of the ways that Intuit—the software company best known for its TurboTax and QuickBooks applications—is evolving its business model is by integrating AI technologies into its processes. “It's leveraging all the data on the platform to really build decision engines and algorithms that automate the work, and find ways to put more money in our customers' pockets,” says Goodarzi. “We ultimately use all the tax data that the consumer has to help the expert understand what deductions are the best for them.” [Watch video]( SHARE: [twitter]( [facebook]( [LinkedIn]( [email](mailto:?subject=Talks%20at%20GS%20With%20Intuit%20CEO%20Sasan%20Goodarzi&body=https%3A%2F%2Fyoutu.be%2FTIK-_kwWE4Q) February QuickPoll: Investors Maintain Bullish Sentiment Investors are positioning themselves for a strong growth environment based on expectations of additional fiscal stimulus and an improved vaccine outlook, according to the latest Marquee QuickPoll survey of more than 1,000 Goldman Sachs institutional investor clients. Here are highlights from this month’s poll: Short-lived Short Squeeze? Investors expect that the recent short squeeze—prompted by the surge in retail trading—will be contained, with only 5% expecting a significant spillover into risk. The expectation is also reflected in investors’ views on risk broadly. “While most investors feel that their risk levels are adequate, only 6% feel that their risk positioning is too large,” says [Oscar Ostlund]( head of content for Marquee, the digital platform for the Global Markets Division. He notes that the results are strongly correlated with investors’ overall bullish outlook on the S&P 500. Growth Tailwinds. One tailwind fueling investors’ bullish outlook this month stems from the improved vaccine outlook as investors grow more optimistic about the timeline—with 54% of investors now expecting mass U.S. vaccine distribution by July. In December's QuickPoll, by contrast, 46% of respondents said they expected mass vaccination by August or later. Fiscal stimulus is another factor boosting investor optimism, Ostlund notes. “With discussions around the next fiscal package underway, investors seem to have come to a broader agreement on a larger package, with 64% of investors expecting a package larger than $1 trillion,” he says. Eye on Rates. Investors are keeping a closer eye on the direction of interest rates, with 41% of survey respondents now expecting nominal rates to be range-bound, compared with 26% last month. “On the one hand, investors expect limited moves in nominal—and hence in real—rates, but on the other hand, investors are potentially changing views on the correlation of bonds and equity prices. From here, a sell-off could be more damaging to valuations,” Ostlund explains. Watch Oscar Ostlund discuss the results of this month's QuickPoll [here](. 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%20Interested%20in%20Learning%20More%20About%20Marquee.). SHARE: [twitter]( [facebook]( [LinkedIn]( [email](mailto:?subject=February%20QuickPoll%3A%20Investors%20Maintain%20Bullish%20Sentiment&body=) The Daily Check-In With Goldman Sachs Above: Mike Moran of Goldman Sachs The outlook for corporate pension plans and retirement savers is looking more promising this year amid rising interest rates and potential legislation that could make it easier for participants to save, according to Goldman Sachs Asset Management’s [Mike Moran](. “For corporate defined benefit pension plan sponsors, higher interest rates would actually be welcome news,” he explains in an episode of The Daily Check-In. “That would lower the value of their liabilities and allow them to increase their funded ratios.” Individual retirement savers, meanwhile, could see an active year of changes to how Americans can save. “There is a lot of bipartisan support for additional retirement-related legislation that will potentially again continue to increase coverage, increase ways for participants to save,” he says. In another episode of The Daily Check-In, [Nishi Somaiya]( who helps run the firm’s private investing business, looks at the opportunities in growth and technology investing, while [Greg Lee]( of the Investment Banking Division discusses the outlook for the cruise industry. For more Daily Check-In videos, [subscribe to our channel on YouTube](. [Watch video]( SHARE: [twitter]( [facebook]( [LinkedIn]( [email](mailto:?subject=The%20Daily%20Check-In%20With%20Goldman%20Sachs&body=https%3A%2F%2Fyoutu.be%2FECudoGHoHKQ) Top of Mind: The IPO SPAC-Tacle Is the boom in IPOs and special purpose acquisition companies (SPACs) sustainable? In a new episode of Exchanges at Goldman Sachs, Jay Ritter, professor of finance at the University of Florida, tells Goldman Sachs Research’s Allison Nathan that he is not particularly worried about a bubble in the market, given generally solid fundamentals of the companies going public today, and has reasons to be optimistic about their futures. “The market is not viewing all of the companies the same by any means, but when you start looking at these high ratios, the only way to justify them is with pretty optimistic assumptions. Now there’s a reason that the market has been willing to pay high multiples for some of these companies,” Ritter says. David Ludwig, Goldman Sachs’ head of Global Equity Capital Markets, tells Nathan that overall IPO strength can continue as long as the economic recovery continues. “I think if the macroeconomic recovery continues, if vaccine prospects remain positive, we think that we can come close to some of the volumes you saw last year.” In contrast to Ritter and Ludwig, however, Michael Klausner, professor of business and law at Stanford Law School, says the SPAC market may be heading into bubble territory. “We have price jumps on simply rumors of deals, and we sometimes have a huge pop on announcements of deals,” he says. “So to me, this doesn't look like pricing based on fundamentals. And that's why I think we may well be in a bubble.” [Listen to podcast]( [Read report]( SHARE: [twitter]( [facebook]( [LinkedIn]( [email](mailto:?subject=Top%20of%20Mind%3A%20The%20IPO%20SPAC-Tacle&body=https%3A%2F%2Fyoutu.be%2F8c5y7DNQ_gM) Goldman Sachs Media Highlights Reuters - February 3 [Goldman Sachs Names Susie Scher as Chairman of its Global Financing Group]( Bloomberg - February 3 [Goldman Sachs Wants to Get Cozy With Main Street and Its Money]( Bloomberg - February 2 [Goldman’s Currie Likes ‘Fundamental Story’ Behind Silver]( (5:06) Business Insider - February 1 [Goldman's Co-head of Asset Management Breaks Down His Approach to Investing In Pandemic-Wrecked Businesses—and Shares 4 Keys That Have Shaped His Career Success]( Bloomberg - January 29 [There Is No Bubble Trouble in Equities: Mossavar-Rahmani]( (4:45) [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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