Goldman Sachs is making a bold macro call: the U.S. dollar is going to stay strong, and the Japanese yen is heading even lower. In a note published Sunday, Goldman raised its USD/JPY forecasts to 162 in three months, 163 in six months, and 165 in 12 months — a significant upgrade from prior projections of 160, 158, and 155 respectively. The yen had already hit its weakest level against the dollar in four decades last week, and Goldman says any intervention by Japan’s Ministry of Finance will only temporarily interrupt the slide. The underlying drivers — higher-for-longer U.S. yields, low recession risk, and only gradual Bank of Japan rate hikes — strongly favor continued dollar appreciation.
Goldman’s bullish dollar thesis rests on two structural tailwinds it expects to persist well into 2026: the U.S. AI investment boom and an energy “supply bust.” These dynamics are pulling massive capital flows into U.S. assets, underpinning the greenback even as fiscal concerns linger. The bank revised its euro outlook lower as well, projecting EUR/USD at 1.14 in three months before slipping to 1.12 over the following six months. Meanwhile, Bank of America published its Q3 stock picks, offering investors concrete ways to position around this macro backdrop. Spotify leads the list with a $685 price target — implying 41% upside — as Bank of America highlighted AI-driven remix tools, new subscription tiers, and a growing podcast and audiobook business as underappreciated growth drivers. Visa made the list as a “durable double-digit revenue compounder” with a $410 target implying 13% upside, and Walmart rounds out the group with a $144 target and 29% upside as affluent consumer spending continues to power the retailer’s share gains.
For retail investors, the macro picture matters for portfolio positioning. A strengthening dollar typically weighs on U.S. multinational earnings and creates headwinds for foreign-currency assets — but it also signals that domestic consumer-facing companies are in a sweet spot. That’s exactly what Bank of America’s Q3 picks reflect: Spotify (SPOT), Visa (V), and Walmart (WMT) all generate the bulk of their revenue domestically and benefit from strong U.S. consumer spending. With Q3 kicking off after a strong Q2 — the S&P 500 rose nearly 15% in the second quarter and the Nasdaq surged 21.4%, its best quarter since 2020 — these picks offer a blend of momentum and fundamental support heading into earnings season.
