Goldman Sachs PB weekly: hedge funds rotate from tech into industrials; favors power infrastructure basket
- Goldman Sachs Prime Brokerage (10/9 weekly): S&P 500 rises 1.2% for the week as investors position ahead of Q3 earnings season and next Tuesday's CPI; IPPs, AI software and power infrastructure outperform; NeoCloud, Bitcoin-sensitive stocks and unprofitable tech lag
- Prime: modest net selling of US equities; hedge funds rotate into industrials and sell information technology (especially Thursday), while healthcare sees a 4th consecutive week of deleveraging; OpenAI revenue headlines trigger heavy semiconductor/AI selling Thursday, continuing into Friday
- Futures: Nasdaq's financing premium versus the S&P reaches the 98% percentile of its 1-year range, suggesting increased leveraged long positioning; the largest asset-manager category records $3.2 billion in net selling over 9/8-9/29
- Derivatives: earnings season starts next week; financials have underperformed since their peak (XLF -6.5%), with earnings-day implied volatility relatively cheap; heavy buying of VIX upside convexity, while SPX downside convexity remains relatively cheap
- ETFs: Brazil's EWZ trades more than $8 billion on Monday, its largest single-day notional volume in the fund's 25-year history
- Goldman's desk favors the Power Up America basket (GSENEPOW), calling power the most underappreciated AI bottleneck; in TMT, NDX extends its winning streak and software outperforms semiconductors by about 800bp; next week's focus: TSM and ASML earnings, WDAY and ACN analyst days, and Semicon West (AMAT, LRCX)
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