Here we are on the last day of the first half of 2025 with the S&P trading at new all time highs, because of what Goldman's Pierre Saboreault calls rapidly improving sentiment, which can be seen as a result of the cease-fire in the Middle-East, the resulting drop in Oil prices, and the incrementally dovish narrative from Fed speakers as well as superficial easing in trade and tariff negotiations.
Taking a closer look below the surface, Megacap Tech has taken back its leadership role (up 6% last) with the AI bubble raging once more (GSTMTAIP +502bps on the week); Meanwhile, the retail bid is clearly visible through the lens of Goldman's Non Profitable Tech (+856bps), Retail Favorites (+450bps), and Memes (+354bps) baskets.
According to the Goldman trader, the latest burst of buying from Fundamental investors (as noted earlier, there has been $7bn of net demand on Goldman's US desk from Long Onlys over 5 days, in a combination of long buying and short covering in US shares from Hedge Funds according to our PB data) was the springboard for a new record close by the S&P500 on Friday, with the index gaining +344bps on the week. Interestingly, the "non-economic players" seemed mostly sidelined in that context, with subdued buyback flow from Corporates according to Goldman's buyback desk.
