Episode summary
Europe’s Opportunity, AI, and Market Volatility with Goldman Sachs International's Co-CEOs
Exchanges (Goldman Sachs)
· · 28 min · Guests: Anthony Gutman, Kunal Shah
Summary
Goldman Sachs International co-CEOs Anthony Gutman and Kunal Shah argued that the Middle East conflict has raised volatility and risk appetite has weakened, but it has not broken the broader backdrop of solid economic growth, strong balance sheets, and continued corporate activity. Shah said clients are adjusting to higher energy prices, a stronger dollar, and more differentiated outcomes across currencies, rates, and equities, while still finding opportunities in places like the Brazilian real, the Australian dollar, the Chinese renminbi, and UK fixed income.
Gutman made the case that Europe still has a structural opportunity if it can act more like a bloc, pointing to 450 million people, about 15 percent of global GDP, and signs of progress on integration, deregulation, and a savings union. He said Europe’s strategic themes fit Goldman’s business mix: capital solutions, private wealth, and financing needs tied to infrastructure, defense, renewables, and energy.
On AI, Shah said the market has become more discerning about winners, losers, and moats, but he did not think the theme had lost its force. Both co-CEOs said dealmaking and issuance remain strong, with strategic M&A and record European equity issuance showing that capital markets are still open even in a more volatile environment.
Key takeaways
- Shah said the conflict has shifted markets toward a safer dollar, pressure on European assets, and selective opportunities in commodity-linked currencies and UK rates.
- Gutman said Europe’s long-term case rests on integration, a savings union, deregulation, and operating as a bloc rather than 27 member states.
- Gutman said Goldman sees Europe as a major opportunity in capital solutions, private wealth, and financing tied to infrastructure, defense, renewables, and energy.
- Shah said AI is pushing investors to distinguish between companies with real moats and those exposed to disruption, but he still sees ongoing enthusiasm.
- Gutman said strategic M&A and record European issuance show that capital raising remains strong despite geopolitical uncertainty.
Notable quotes
“the market at this point is a bit more discerning and is trying to think through actually some of the winners, the losers, those that may be more directly impacted”
“if Europe operates as a block, it has the opportunity to create real economic prosperity. And that's good for all of us”
“I think it's fair to say that we've exited the phase of pure AI optimism”
“we've seen record volumes. If I look at, yesterday we did an issuance for EQT in Galderma, was was over 5.5 billion dollars”
“I think the biggest thing that we consistently see and hear from business leaders and CEOs is that if anything, what AI is doing is driving a view that scale is critical”
How the episode opens
One of the most consequential trends this year has been the outperformance of global equities relative to the US. But amid the escalating conflict in the Middle East, can this trend continue? And what are the implications for deal making and IPOs?
I'm Allison Nathan and this is Goldman Sachs Exchanges. I'm here in our London office with the two co-CEOs of Goldman Sachs International. Anthony Gutman and Kunal Shah.
In addition to running Goldman Sachs International, Anthony is the global co-head of Investment Banking. And Kunal is a global co-head of the firm's Fixed Income, Currency, and Commodities business. Anthony, Kunal, welcome to the program.
Thank you. Great to be here. So, just to start, it's obviously a pretty precarious moment as the war in the Middle East continues to unfold.
You both oversee our business in the Middle East as part of your role leading the firm's efforts in EMEA. We're two weeks into this conflict. Kunal, what are your observations?
And how are you thinking about activities in the region more broadly? So, Allison, these are clearly unsettling times. If you think about the Middle East, it's been a big strategic focus for us.
We've been present in those regions for several decades. We have teams cross the likes of Abu Dhabi, Dubai, Tel Aviv, Riyadh, Doha, Kuwait. So, right now, look, we're very focused on the safety of our own people.
In some of these countries they've lived through similar moments, and our people are very resilient. They have the grit to try and get through this. In some of the other countries these threats are fresh.
And our people are adapting to these very tense, difficult realities. We're following the guidance of the local officials. We're doing everything possible as a firm to help support our people and their families.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- ceo sentiment
- market volatility
- europe opportunity
- ai
- europe markets
Companies and tickers mentioned
- GS
- Goldman Sachs
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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