GS Novak Industrials and Materials

GS Ryan Novak - GS U.S. Industrials & Materials | chems post Q2 | prime | off cycle EPS 17 Aug 2026 Ryan Novak · Goldman Sachs · US Industrials & Materials Mon 17 Aug 2026, 6:36am ET

Good morning – quiet in markets overnight. US S&P futures up 15bps to start led by tech with rhetoric overnight that Fed rate hikes embedded in markets could be too aggressive with inflation that is easing overall. Strikes in the Middle East reduced prospects for US Iran talks. KOSPI led overnight up 242bps, broader Asia in the green as well. Europe more flat to down with France down 17bps. In commodities, crude modest bounce given the aforementioned attacks WTI $83, Brent approaching $90. 10 year firm at 4.69%, Dollar lower with DXY closer to $99 and Bitcoin holding $63.2k.

China July data: weakened broadly from June and missed market expectations, pointing to a soft start to Q3 amid continued divergence between resilient exports and subdued domestic demand. Industrial production (IP) growth slowed to 4.5% yoy in July from 5.3% yoy in June, reflecting slower export growth and weaker output growth in ferrous metals smelting, power generation, and pharmaceuticals industries. In sequential terms, IP contracted 0.3% mom non-annualized in July (vs. +1.0% mom non- annualized in June), broadly consistent with last year’s pattern of softer quarter-start momentum. Fixed asset investment (FAI) growth fell to −12.8% yoy in July from −9.3% yoy in June on a single-month basis despite a low base, as unfavorable weather and slow government spending continued to weigh on investment activity. Retail sales growth eased to +0.6% yoy from +1.0% yoy in June despite favorable base effects, mainly dragged down by goods sales. The Services Industry Output Index—which is reported in real terms and closely tracks tertiary GDP growth—also slowed to 4.3% yoy in July from 4.7% yoy in June. Together with our high-frequency trackers for the first half of August, the July activity data point to downside risk to our Q3 real GDP growth forecast of 4.6% yoy.

GS marketing – quite a few corporates on the road this week – let me know where you would like to follow up. 1. BCC CFO & others in NY Tuesday – group lunch has a few seats if you would like to join. 2. HAWK CEO & CFO in NY Tuesday (Boston, Denver on each side). 3. ALGT CFO in Boston midweek. 4. CSL we’ll have the full suite for a virtual group meeting Thursday at 12pm ET. Let me know where your interest is.

GS prime data: HFs net bought US equities every day this week and at the second fastest pace in the past year (+2.1 SDs), led by long buys in Single Stocks and to a lesser extent short covers in Macro Products. Macro Products (Index and ETF combined) made up ~30% of the total net buying (+1.0 SDs 1-year), driven by short covers and long buys (1.4 to 1). US-listed ETF shorts decreased for a 6th straight week by −3% (−12% month/month), led by covering in Small Cap Equity, Tech, and Large Cap Equity ETFs partially offset by shorting in Real Estate, LatAM, and Health Care ETFs. Single Stocks made up ~70% of the total net buying (+2.1 SDs 1-year), driven by long buys and to a much lesser extent short covers (7.6 to 1). 8 of 11 sectors were net bought, led in $ terms by Info Tech, Comm Svcs, Health Care, Financials, and Staples, while Real Estate, Energy, and Utilities were net sold, which suggests a pro-cyclical stance. Regrossing is occurring more in macro products and surprise buying in materials – follow through from last week.