The Markets The three top equity market themes
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Jul 11, 2025 Lou Miller, the Global Head of Equity Custom Baskets at Goldman Sachs, sheds light on the current equity market dynamics. He highlights the significant drivers behind the market's strong performance, including minimal tariff impacts and rising AI excitement. Miller also discusses the innovative concept of investment baskets, showcasing key themes like AI advancements and global diversification. He anticipates an optimistic earnings season, suggesting companies may surpass low margin expectations despite tariff concerns.
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Market Resilience and Drivers
- The market is resilient due to positive factors and the absence of predicted negatives like tariff impacts.
- AI narrative and supportive fiscal policies create a benign environment for risk assets and a historic rally in beta stocks.
Top Equity Market Themes
- Key equity market themes are AI, policy changes, and select rest of world trades.
- Baskets enable tradable access to these specific themes not covered by traditional indices.
Selective International Exposure
- Despite U.S. market excellence, certain international opportunities like European defense and Japanese corporate governance are attractive.
- Selective foreign exposure provides important diversification within a valuation context.