This was supposed to be one of those quieter summer weeks when traders could take their hands off the wheel for a few minutes. Instead, Goldman Sachs’ Tony Pasquariello finds himself surveying a market where Treasury intervention woke up the macro complex, momentum started throwing furniture around again, oil pushed inflation risk back onto the screen and gold quietly emerged as one of the cleaner expressions of an increasingly complicated policy backdrop.
Takeaways by Dark Side of the Boom™
The market is noisier than the index suggests. Momentum has gone feral again, tech leadership is being violently reshuffled, bonds and oil are adding cross-asset stress, and midterm seasonality argues for higher volatility even as the S&P itself grinds sideways near the highs.
The bull case still has real structural support. Nominal growth remains strong, earnings are superb, buybacks are healthy and Goldman’s positioning data show neither hedge funds nor retail are running anything close to maximum leverage. Tony’s base case remains a grind higher into early September, consolidation into the autumn, then the familiar year-end charge.
The AI story is broadening into a financing and ROIC story. Capital availability is not yet the constraint; the bigger questions are cost, sequencing and eventual returns. At the same time, the resilience of the S&P ex-AI basket argues that this is not simply one narrow AI beam holding up the whole market.
Gold may be the cleanest hedge against the policy regime. Pasquariello likes the flow, likes the chart and likes the protection against global debt-and-deficit concerns. As markets move from yen intervention to Treasury buybacks and long-end debt questions intensify, gold increasingly looks less like a crisis trade and more like insurance against policymakers reaching deeper into the toolkit.