GS Armbrust What Matters Today HF Exposure to Mag 7 at the Highs Large Bank Earnings ASML and Anthropic Today US Equity Positioning is a Tailwind HF Performance in September

GS Armbrust - What Matters Today HF Exposure to Mag 7 at the Highs Large Bank Earnings ASML and Anthropic Today US Equity Positioning is a Tailwind HF Performance in September 14 Oct 2026 Nelson Armbrust · Goldman Sachs · FICC & Equities 14 Oct 2026

1) HF Exposure to Mag 7 at the Highs

This was a surprise to me. Yes the group has been performing well (Mag 7 has outperformed the NDX for 8 straight sessions), but overall net risk is low. What stands out is that – according to GS PB – Net Exposure to Mag 7 is at the highs (first graph below). Also surprising, 3 month implied volatility is near the lows. So if you are long, this is an opportunity for you to add hedges.

MS (+/=): stock flattish pre mkt. Headline beat driven by Trading (equities $5.8bn vs $4.9bn cons more than offsetting FICC Miss) and NII (high teens beat vs cons – looks like market based lending) .. Wealth flows were very strong, with fee based flows of ~$80bn and total flows of $232bn (!) .. The one thing to pick at is the miss in PT income & margin in wealth, which looks like wealth compensation as a % of rev went up a couple of points .. CET1 flat at 14.9% w/ pace of buyback (~$1.5bn) consistent .. What’s going on in the wealth margin may have some competition implications on handful of other names and can see some picking at this at MS given wealth PT margin expansion has been a big part of the multiple expansion story (welcome thoughts) but big picture, most of the line items people were worried about regarding ‘normalization’ off 2Q look pretty strong .. Stock -17% since mid July.

BAC (-/=): stock is -4.6% pre mkt, 4% PPNR miss with the largest impact coming from trading, which was down ~5.5% YoY vs them guiding to roughly flat YoY … Both equities and FICC missed expectations, with FICC -17% YoY. Investment banking a slight beat (debt underwriting) but not enough to stop a headline fee miss – against this fee miss, expenses were in-line leading to -370bps of operating leverage in the qtr. NII looks ~30bps better than expectations. They bought back $6bn in stock, so no slowdown here QoQ (despite being in focus around capital) and TCE/TA is practically unchanged at 6% and the AOCI marks don’t look that large on first glance (this doesn’t include HTM) – CET1 was down -40bps. Think people care about 3 items here:

• What is going on in trading to cause the weakness vs peers

• looking for more color on expenses going forward, including levers if fees remain weak (was underwhelming this qtr w/ the operating leverage update at conf) as well as confirmation around to what extent remediation efforts from last nights’ money laundering fine are in the run rate (press reports indicate BAC is saying it’s all in th expense base)