GS Duttenhoefer´s Daily July 29

S&P +21bps (+8.5% ytd) with ongoing momentum reversal; our TMT momentum pair lost 10% yday (software higher vs semis lower); KOSPI -7% today driven by SkHynix -10% (numbers, see below); no new Iran headlines; Brent $87 and rates unchanged with US 10yr at 4.61%; Gold $4031 and Bitcoin $64k; Fed decision today (35% prob for a hike) and focus on big earnings (MSFT & META today; AAPL & AMZN tmrw).

SkHynix: stock -10% on profit miss; 2Q operating profit of 60.5tr won ($42 billion) versus Cons 64.2tr won; gross margins of 83%; said memory prices saw “significant” increases vs the previous quarter, and it has finalized long-term agreements with about 10 customers; mgmt notes that memory can’t be in state of severe shortage for an extended period, and they are taking steps to expand supply. (BBG)

Fed preview: expect the FOMC to leave the fed funds rate unchanged; the statement might acknowledge the upside risks to inflation; we continue to think that the combined impact of tariffs, the war, and AI effects on monthly inflation should diminish in the months ahead, leaving core inflation soft enough for the FOMC to stay on hold through the end of the year. Link

Visa mgmt on the consumer: “the consumer spend environment remains strong and the strength is pretty broad-based; we're seeing improvements around credit and debit, discretionary spend, non- discretionary spend, card present, card not present, and across the spend bands as well.“

Crypto update: July's return of ETF inflows brings into question whether this is the start of a durable re- accumulation or merely another relief rally (Aug is generally weak); the peak-to-trough window now stands at 268 days with a -54.26% drawdown; if the current cycle loosely mirrors the ~360-380 day patterns of prior cycles, it would point to October 2026 as a comparable window. Link

good TMT update from our spec sales: Index vs Stocks; while pockets of global Tech (Semis and AI ecosystem) are in a high-vol, drawdown in recent weeks (e.g. SNDK >50% below, Samsung >40% below, MU >30% below), the broader ‘stock market’ hasn’t quite noticed with the Equal-Weight S&P500 up a cool 3 days in a row, pushing to new ATH. Link

Deepseek: the CEO gave an assessment of the state of the market to potential investors; “our gap with the US is only resources”; “Turning money into NVIDIA cards is better than putting it in the bank”. Link

update on flows: institutional positioning is cleaner; retail activity has begun to taper and corporates are back in the market; Equity ETF and Mutual funds saw the largest ytd inflows on record at $659bn; we are now below the short term S&P trigger level (7453) and continued moves lower will unlock selling from CTAs; always worth a look here: Link

worth a read on AI: central argument is not that AI demand will collapse but that the AI financing model only works if demand growth keeps accelerating; analogy is to 2008 housing, not 2000 dot-com; worth a read. Link

good read on debt vs capex: we frame our expectations for AI-related debt issuance; check the hyperscaler CapEx trajectory, estimate a debt-financed share of hyperscaler CapEx and incorporate expectations. Link

Quote of the Day: “Kinda funny given the worry that Microsoft is about to cut capex”; Gavin Baker quote on X yday which has been quoted by a few investors.

3 US themes that are not AI: 1/ consumer experience stocks offer exposure to strong secular growth in consumer spending on experiences at undemanding valuations, 2/ “compounders” with strong earnings growth and returns on capital has recently lagged and now trades at a large valuation discount and 3/ M&A candidates (GSRHACQN) should benefit from the ongoing surge in M&A. Link

Stat of the Day: aggregate Hedge Fund positioning in US AI stocks (GSTMTAIP) has come down sharply since the highs in June and net exposure now stands in the 12th percentile vs. the past year. Link

Chart of the Day: Equity ETF and Mutual funds saw the LARGEST YTD inflows on record at $659bn. Link

Source: Goldman Sachs; past performance is no indicator for future performance.

Johannes Duttenhoefer, Executive Director, Global Banking & Markets