GS Novak Industrials Materials

GS Ryan Novak - GS U.S. Industrials & Materials | consumer | machinery post Q2 18 Aug 2026 Ryan Novak · Goldman Sachs · US Industrials & Materials Tue 18 Aug 2026, 6:36am ET

Good morning – US S&P futures lower by 50bps early on this morning with long end Treasuries under pressure (yields highest since 2007), crude the highest since late July (fresh vessel attack reported in the Strait of Hormuz) and macro data overnight mixed (German ZEW a notable beat 34.2 vs. 30.1). Markets lower overnight overseas with KOSPI reopening down 155bps, Japan down 254bps. Europe holding in better with Germany and France each down 40-50bps. As mentioned, in commodities, crude at recent highs with WTI above $85 and Brent to $91. 10-year 4.73% at highs, dollar flat with DXY approaching $100 and Bitcoin modestly risk off down 50bps to $64.1k. Watching housing starts and industrial production later this morning.

On the micro, very quiet other than off cycle earnings. HD trading very slightly higher this morning with a fiscal Q2 EPS beat and affirming EPS and sales guidance. Total comps +1.7%, US comps +1.3% will be listening for macro commentary on the consumer and any views by market. TSLA headlines around cybercab in Austin. Watching KEYS TOL SQM and MRCY with earnings post market.

Inbounds heavy yesterday relative to volumes and folks that are out of their seats … rail strength UNP NSC up 2% …. FDXF down 4% … IBP vs. the rest of building products … where are we in the regrossing … LHX feedback -4% … FTAI up 5% … BA down 250bps … WCC grinding higher up 300bps … CAT up 3% … APD down 3% … MAIR reversal from the open …

Plenty of the moves were tweaked by updated 13-F filings out late Friday – we did a scan – let me know if you would like to discuss …

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.

Machinery – desk views coming out of Q2: continues to be a tale of three end markets – 1. Construction where sentiment is most positive 2. Truck where sentiment continues to inch more negative and 3. Agricultural machinery where sentiment was trying to get more positive but has flatlined. In construction CAT continues to have standout results and the debate is between the multiple which is elevated by the gas turbine business vs. the backlog which is driven by much more. Think CAT remains more of a long on dips. Equipment rental continues to be debated with sentiment leaning positive URI after a string of good quarters – the rest are debated with SUNB a potential pair with URI, HRI the M&A levered version of the expression and EQPT offering the most torque but also the most debated. In truck, sentiment has soured

on CMI but more on the power side with investors thinking their update around the investor day was too late and not enough while PCAR expectations are for a step down in Class 8 orders in the back half (we disagree) so hard to be anything but cautious at $130. Sentiment across agricultural machinery was trying to get more positive in the last few months but results from AGCO CNH, as well as early order program checks for DE suggest more downside than upside near term. It’s also too early to have a strong view on 2027 planting season but trends do not suggest a snap in earnings. We lean positive CAT, equipment OEMs – specifically TEX on rerating potential, rental capex improvement and potential for M&A (aerials), we like PCAR as a backdoor (less expensive, with parts of the business at trough) exposure to transports. Cautious on ag machinery with expectations vs. reality for 2027 likely in different spots. TKR is likely the most crowded long in the group, particularly vs. its market cap. DE and PCAR the more crowded shorts. Welcome your thoughts and feedback.

8/17-8/19/26 HAWK marketing in NY, Boston and Chicago with CEO and CFO. 8/18/26 BCC CFO & IR in NY. 8/19-8/20/26 ALGT CFO in Boston. 8/20/26…