Next year will provide opportunity for mid caps and the financials: Goldman's Wilson-Elizondo

Joining us now is Alexandra Wilson Elizondo, a new partner at Goldman Sachs and co-chief investment officer of multi-asset solutions at Goldman Sachs Asset Management. There's a kind of a feeling that there are some animal spirits from the election that are sort of rippling across a lot of different markets. Is that true? Are there specific stocks just to buy or will they all be, you know, at 22 times? I wonder, you know, how much is left, even if there are animal spirits. Yeah, I think it's a great question. There are many reasons to recalibrate portfolios going into next year. Oh, now you sound like J-PAL. Are we recalibrating? It's a great person to sound like. I think that in the short term, we see a lot of reasons for the macro to continue to pass through into markets, and that there's a lot of momentum when you look at surprise indices and the breadth within them. And that, you know, the valuations, yes, they are high, but you know what, they've been high all year. So we continue to see some opportunity and momentum. You know, that said, I think next year is going to be more of a show me, don't, you know, tell me story. And it's going to give a lot of opportunity for the belly of the index. Some spaces like mid-caps and more in the financial sector, we can see some of the business models get unhandcuffed. How many variables are there in this new political environment? I mean, we've got possible cost cutting from Elon and Ramaswamy, obviously. We've got possible extensions of tax cuts and a widening, theoretically, of the deficit. You've got tariffs. Are these all conflicting, pulling different ways, some of these things? What's bullish? Well, when you take a step back, one of the things that we've been focused on is the market's looking to price Trump 1.0 and 2.0 the same. And we don't think that's going to be the case. In particular, when it looks at the prioritization and the speed at which things start to come out. Now, holistically, you know, there's what Washington can do versus what Congress can do. And so we're more focused on what would be imminent, which is on the tariff side. You know, when we do our baseline outlook, we still have the base case, you know, pretty strong resilient growth within the U.S., albeit some stickier inflation. You know, one of the things that could be a tail event is the level and degree at which protectionism ends up, you know, being the dominant force in the market. But holistically, you know, we're still focused on those macro variables, in particular, United States. And this stuff, most of it, on average, continues to be pro-growth and cyclically pro-growth. Is deregulation, pro-growth, and I guess interest rate cuts are good for the market. But could those be curtailed if inflation from the tariffs comes back? Yeah, they very well could be. But when you look at the way the market's priced right now, in particular U.S. rates, I mean, it's pretty hawkish. We've only got two cuts before May now. So not only is it pricing in inflation sticky, it's pricing in a little bit of an acceleration there. So you think we're tight now? Because, I mean, given the Bitcoin, the stock market, everything else, it doesn't really look like we're slowing things down. It doesn't look like there's any reason to cut at all. Well, if you look at some of the just outright variables, which is the labor market, which has driven a lot of the tightness and levels of inflation that we've seen. That's easing? It's easing. Yeah. And we're going to, you know, see some more data today. But on average, the rate of growth in jobs, the quits rates, wage inflation, all of that's getting to a better place.