Goldman Sachs, S&P 500, and Tariffs, Ep. 314

Capitalist Investor

In the latest episode of the Capitalist Investor, hosts Derek and Tony dive into a range of timely and intriguing topics that are making headlines in the economic and financial world. Here are the top five hot topics they discussed:

1. Goldman Sachs' Recession Predictions: Goldman Sachs has ramped up the 2025 odds of a recession, boosting it from 20% to 35%. This shift has inevitably caught the attention of investors and consumers alike. With the markets always seeking predictability, any hint of economic downturn can cause ripples of concern. Derek likens these predictions to NFL draft grades, highlighting the uncertainty and speculation surrounding them.
2. Tariffs and Their Impact on Car Prices: The ongoing debate over tariffs, especially under President Trump's administration, has a direct impact on car prices. The hosts discussed how tariffs might lead to increased car prices and the ripple effects this can have on both consumers and car manufacturers. They explored the implications of "on-shored" car manufacturing and the potential for future savings if tariffs lead to more domestic production.
3. S&P 500 Projections: A Closer Look: Goldman Sachs is not only revising recession odds but has also adjusted their targets for the S&P 500, predicting a target of 5,700 by the end of the year. The current levels suggest a possible pullback from these lofty expectations, indicative of a potentially bumpy ride ahead for investors in the stock market.
4. Doge and Its Role in Inflation Conversations: The episode touched on the cryptocurrency market, specifically Doge, and its perceived effects on inflation. With platforms like Truflation indicating real inflation rates, there's an ongoing discussion about the impact of reduced government spending and money supply on inflation, with Elon Musk frequently adding to the conversation.
5. Inflation, Government Spending, and the Conspiracy Theories: Tony and Derek explored the idea that government spending cuts could have positive long-term effects on inflation. They discuss the need for identifying and eliminating wasteful spending, perhaps leading to a scenario where taxes could be lowered further. This spurred a conversation around conspiracy theories, notably how stopping wasteful spending could be more impactful than seeking arrests for corruption.

These topics provided listeners with a comprehensive look at current economic dynamics, drawing on expert insights and intriguing hypotheses about future fiscal and market conditions. Tune in to get the full scoop and hear Derek and Tony's in-depth analysis of these vital issues facing investors today.

Chapters

1. S&P 500 Flat or Negative Outlook (00:00:00)

2. Stagflation Concerns and Economic Impact (00:05:05)

3. Tariffs and Automakers Discussion (00:08:25)

4. Used Car Parts Stocks Surge (00:11:12)

5. Inflation Tracking with Truflation (00:14:50)

6. Economic Challenges from Reduced Margins (00:17:19)

7. Questioning Corruption and Accountability Discrepancy (00:19:54)

8. Two Financial Planning Submissions (00:23:14)