Pies

Goldman Sachs has its fingers in a lot of pies, and when it comes to ‘the macro’ has the resource and reach to have as an informed view as any. The complexity of cross-asset and, cross-border flows, warrant all sorts of intricate models, that are then distilled and simplified for the rest of us with the use of words and colours that are normally the domain of the climate-aware TV weather reporter. The bear-defying YTD romp in equities, led by the tech fuelled NASDAQ, has – one suspects – left many a money manager scrambling to buy some NVIDIA before month end, lest their investors start to question their talents in the half-year call. AI, as taxi drivers now tell us, is the next big thing. That said, according to Goldman, the easy money has been made, given how many clients are ‘long’. Sentiment is stretched, and stocks are overbought. ‘Lofty’, is the somewhat benign word they use given the potential loss of capital and impoverished retirement that beckons. Even the AAII Bull-Bear spread, a popular yardstick of how much clicking is happening at Robinhood, is at 1-year highs. Talking of Robinhood, 24-hour trading has just gone live surely indicating the boom times are back, ‘baby’. Hmm. Vanda Research also show that the retail money has been relentlessly driving markets higher YTD and, whilst still on the bull train, strategists there have started to whisper about when it’s time to short US equities. If they’re whispering it publicly, the official call is but weeks away. This should be news for all those boomers hooked on stocks and primed to buy any sell off, but for those uncomfortable with crowds, the taxi rank is full. Time to go. Or for those in the macro hut, time to short those overbought US stocks. It’s showtime.