The Markets

Josh Schiffrin, Chief Strategy Officer at Goldman Sachs, dives into the recent Federal Reserve policy changes with Chris Hussey. They discuss the implications of the latest rate cut and how labor market conditions influenced it. Josh highlights key upcoming labor data to watch and predicts an intriguing trade opportunity with the yield curve steepening. He also shares a cautiously optimistic outlook on equities while acknowledging potential AI risks. Plus, he lightens the mood with thoughts on the Knicks and trading for Giannis!

Brian Dunne, head of Americas Foreign Exchange Options Trading at Goldman Sachs, offers valuable insights into the U.S. dollar's current stagnation and potential decline. He discusses factors that could trigger a sell-off, linking fiscal concerns to asset rallies in gold and crypto. Dunne also highlights how macroeconomic data and recent Federal Reserve nominations could shape dollar movements. His preferred trading strategies include dollar exposure against emerging markets, anticipating a 5–10% depreciation toward fair value.

Brian Garrett, head of equity execution in Global Banking & Markets, digs into the current volatility in U.S. equities. He explains how Fed commentary drives market swings and discusses investor shifts towards defensive sectors like healthcare. Brian highlights that while VIX at 24 suggests moderate risk, real market movements have been more volatile. He proposes practical hedges, including VIX call spreads, and emphasizes the importance of the upcoming December Fed decision in shaping market trends.

Scott Feiler, a consumer sector specialist at Goldman Sachs, joins to analyze the current state of US consumer spending. He shares insights on deteriorating consumer sentiment and mixed earnings reports impacting various demographics. Scott predicts strong turnout for Black Friday despite inflation concerns, as consumers prioritize events over traditional goods. He discusses the convergence of goods and experiences, highlighting softening trends in travel and dining. Finally, he advises focusing on defensive discretionary stocks like off-price and auto retail for year-end resilience.

Anshul Sehgal, the Global co-head of Fixed Income, Currency and Commodities at Goldman Sachs, dives into the U.S. economy's shift from fiscal to credit expansion. He explores the implications for portfolio strategies, emphasizing the rise of AI-driven sectors like semiconductors and commodities. While optimistic about stocks, Sehgal highlights the importance of focusing on specific areas and keeping liquidity. He also discusses the macro risks in private credit and what key economic data to watch leading up to the Fed's next meeting.

John Marshall, head of derivatives research at Goldman Sachs Research, dives into the dynamic role of retail investors in shaping markets. He highlights how retail activity is tracked through various cohorts and trends, showcasing significant ETF inflows and a shift towards thematic buying. John discusses the implications of retail sentiment, suggesting that investors should monitor this enthusiasm rather than fade it. He also explains the surge in short-dated options activity and how retail can drive earnings volatility, linking it to active hedge fund strategies.

Shawn Tuteja, who manages ETF and volatility trading at Goldman Sachs, shares his insights on current market dynamics with Mike Washington. He discusses the implications of recent Fed guidance and the unusual stock reactions during earnings season. Tuteja warns about risks in sectors outside of AI that could impact client positioning. He also suggests buying cyclical sectors like regional banks as the economy may reaccelerate, while addressing the potential for a year-end rally if broader sector participation occurs.

Stratford Dennis, the Head of Emerging Market Equities at Goldman Sachs, dives into the drivers behind the rally in Chinese equity markets. He discusses China's growth prospects, emphasizing the importance of policy support and the potential for continued gains, especially in AI sectors. Dennis also shares insights on broader emerging markets, favoring Brazil for investment while addressing the risks in Argentina. The discussion wraps up with a light touch on the Knicks' championship chances and optimism for the future.

Mike Washington, an equities sales trader with Goldman Sachs, dives into the current state of U.S. stocks and whether a market bubble is looming. He discusses resilient bank earnings and continued consumer spending, highlighting that the markets might be underestimating trade war volatility. Retail investors’ reactions to market dips also take center stage, alongside his recommendation for retail exposure with downside protection. Mike emphasizes upcoming tech earnings and the risks of market concentration, offering crucial insights for traders.

Ashok Varadhan, Co-Head of Global Banking & Markets at Goldman Sachs, offers keen insights on the recent equity rally and its sustainability. He assesses the fundamental support of the rally while flagging potential risks and the importance of diversification. Varadhan discusses using low volatility for hedging and the growing interest in gold and bitcoin as alternatives to fiat currency. He also addresses concerns surrounding a potential government shutdown and proposes staying invested while employing convex hedges such as index puts.