Goldman Sachs: Her er fem advarselssignaler for et snarligt tilbagefald

Uddrag fra Goldman Sachs

Fear went bid, sentiment went offered, volatility spiked, and yet the market “quietly” went back to making generational highs.” That’s how Goldman’s Brian Garrett (who takes a quiet victory lap for his call last week on buying calls on most shorted stocks after the CAR meltup… and subsequent meltdown) summarizes the latest action in his must read Sunday afternoon “Weekend Prep” note

Ahead of what will be busiest week of the year, with both the Fed and BOJ, as well as 42% of the S&P reported, Garrett writes that “it is unclear if participants are excited or disappointed for this upcoming week … central bank decisions, earnings announcements, economic data prints … all of this means ES1 can trade on something other than the latest Pakistan headline or truth social tweet (though we’ll get plenty of those too).” As an aside, Wednesday will be one of the most concentrated earnings sessions in history (% of market cap reporting, charted below).

Meanwhile, as we reported on Saturday, hedge funds are hitting the brakes on this rally, and aggressively de-grossing into all time highs (from 100th percentile just a few weeks ago down to 3rd percentile on a 1y lookback!) as HFs cover their record ETF shorts.

At the same time, Hedge funds are keeping nets relatively contained into all time highs (+/- 53% all year) : to the Goldman trader, this is “prudent risk management in a tape where “unknown unknowns” are happening more frequently than we’re accustomed “

That said, Garrett notes the trader’s almanac suggests once stocks regain previous highs (following a 10% + pull back) they tend to keep climbing that wall of worry: there are four instances since the financial crisis where SPX sold off more than 10% from the highs and the subsequent performance saw previous high regained (aug15-feb16, feb20-jun20, feb22-jun23, and apr25-apr25) with the 1w, 1m, 3m returns are all positive and avg 1.5%, 5.2%, and 8.6% respectively.

Amid the sudden surge of degrossing, the pain trade would be if stocks continue grinding higher. According to the Goldman trader, a lot of conversations on the desk suggest investors don’t feel long enough if the market keeps going and “many client calls have started with a discussion on hedging, then a realization that the book has short beta already, and ultimately leads to a “which calls look most attractive” conversation.”

S&P July upside trades at 12 vol and long upside remains a lonely trade: as Garrett summarizes, “in a market where you want to be away from the crowd, almost no professional investors are outright bullish.” Which incidentally confirms that the April meltup has been nothing but one giant short squeeze coupled with tactical Mag 7 calls.

Below, we share Garrett’s top charts of the week:

• Prime Brokerage (i): clients are unwinding gross exposure into ATHs … GS prime brokerage shows the largest weekly de-grossing activity in 7 months (led by risk unwinds)

• Prime Brokerage (ii): in terms of sectors, the most aggressive de-gross activity occurred in consumer discretionary and technology (3rd largest degross in 5 years)

1-delta: all-time highs bringing out a mixed share activity picture – long only money looking to increase tech exposure while HFs adjusted gross (as above) on the margin 

1-delta: (ii) – expect a lot of air time around “pension rebalance” data: as noted last week, Goldman has 25bn of US equities to sell on month end, the biggest on record (excluding quartelry expiries).

5. Futures: the CTA community has been the most important driver of money flow since the start of the ceasefire … GS futures desk suggests this is complete, having bought $170 billion of global equities month to date. 

6. Derivs (i): S&P gamma positioning is in rare air: GS calculus has dealers extremely short gamma to a break out in spot. 

In this set up, call vol should carry extremely well (July calls trade on a 12 implied vol handles – one of Garrett’s favorite trades out there); spot vol correleation “should” work in your favor to the topside. 

7. Derivs (ii): we’re back to generational highs in terms of the “avg single stock” implied volatility (36.1) vs index implied volatility (19.78) … the market is preparing for continued low correlation / high dispersion tape. 

8. baskets: favorite themes right now:

• short low-income & discretionary consumer (gsxulowd) as pair
• long ai data center infrastructure and equipment (gstmtdat)
• long the power up america trade, again (gsx1pow1)

Garrett’s top trades: long spx calls (outright or on a heavy delta for synthetic put) … long USO downside spreads as a “things get sorted” trade … VIX calendar puts ( long may, short jun) to play for curve steepening … long EM equities (prefer brazil and korea) … short euro, short gbp (macro implications for europe with brent 85+) … KO Puts in SPX screen cheap … SPX lower, US yields lower screen cheap … FXI digi calls screen cheap

But while Garrett is still sniffing out levered upside opportunities as a result of his view that bullish positioning still has a ways to go before its becomes stretched, another Goldman trader – John Flood – is far more cautious.

As Flood writes in his weekend recap note, with the S&P 500 at another fresh all time high and +467bps on the year (after a +975bp move in April), “the market has been able to successfully digest major geopolitical distractions. On that note, over the weekend the US-Iran face-to-face meeting in Pakistan was abandoned. Q1 earnings are off to a solid start. We are stepping into the earnings gauntlet this week with 44% of S&P market cap reporting (GOOGL, MSFT, AMZN, META Wed + AAPL Thurs post close). Buckle up.”

Naturally, the Goldman trader reminds readers that Semis (the SOX) is currently up 18 consecutive trading sessions (longest streak ever) and closed ~50% above its 200-dma on Friday, the most extreme dislocation above its 200-dma since the blow-off-the-top moment in 2000 (the SOX traded >100% above its 200-dma..).

This is driven by: 1) growing confidence in token consumption & linkage to revenue/monetization and 2) another “round” of constraint concerns across the AI Complex. 

While Flood believes the S&P 500 will close 2026 significantly higher than current levels, he warns in a Sunday note (available to pro subs here) that “there are 5 warning signs flashing” that have the Goldman trading desk bracing for a near-term pull back at the index level (which he thinks should be used as a buying opportunity). Here, he repeats many of the same warnings signs already discussed above and yesterday, to wit:  

1. Gross leverage has come in meaningfully as macro shorts hedges have been aggressively covered. Goldman Prime Brokerage data from last week shows overall gross trading activity decreased for the first time in 13 weeks; last week’s notional US de-grossing activity was the largest in 7 months (Sep ’25). US-listed ETF shorts decreased another -1.4% last week (now down -21.5% MoM), led by covers in Credit, Info Tech, and Small-Cap Equity ETFs.

2. April Month end pension rebalance estimate is now over $24b of US equities for sale. This is within the 15 largest sell estimates Goldman has ever seen (since 2000). If you strip out quarterly expiries (which account for both monthly and quarterly rebalances), this is the largest monthly sell estimate ever.  For context, here are the top 5 largest non-quarterly sell estimates:

1. April 2026: $25bn to sell (this month)
2. November 2020: $20bn to sell
3. April 2020: $20bn to sell
4. May 2025: $19bn to sell
5. October 2022: 18bn to sell

April 2026 rebalance vs history: $25bn to sell ranks in the 83rd percentile amongst all buy and sell estimates in absolute dollar value terms over the past three years and in the 92nd percentile going back to Jan 2000

3. CTA community is now long $32b S&P 500 after buying $23b last week and $53b over the last month. For the first time in over a month CTA’s are no longer buyers of the S&P 500 (they have small for sale in a flat tape but more meaningful supply if there is a move lower).

4. Here, Flood picks up what we said yesterday, noting that this tape continues to have bad breadth. Recall, Friday’s record close happened with the second worst breadth for an all time high on record: 324 stocks closed lower for a -148 net breadth reading (only October 2025 was worse, with 80% of the S&P down on a record day).

5. The Goldman US Equity Sentiment Indicator of investor positioning is now indicating stretched positioning…