GS Pasquariello markets macro

Markets / Macro Tony Pasquariello · Goldman Sachs · Managing Director, FICC & Equities Fri 14 Aug 2026, 1:13pm ET

A handful of spare parts from the week:

1. May you live in interesting times. On one hand, this has felt like the first quiet week in a long time, as volume and volatility are clearly ebbing. On the other hand, INTC raised $20bn of equity capital and NVDA announced a $1/2 trillion MOU, so the environment is far from uneventful. Suffice it to say, 2026 continues to be a year like none other.

2. A baseline directional view. The flow of news from here to NVDA and Jackson Hole will be light. If that proves to be correct -- which, to the prior point, is not a given -- the flow of money will be the principal arbiter of price. From my seat, all else equal, the technicals are net positive right now (i.e. buybacks + retail). So, while tactical risk/reward appears middle-of-the-road to me, again the path of least resistance feels locally higher.

3. A follow-on point. INTC raised a reasonably large chunk of capital ... in the teeth of summer liquidity conditions ... and the stock traded well. While the event didn't necessarily come as a major surprise, I still read it as a healthy signal.

4. Space: the orbital opportunity lifts off. In 20 crisp minutes, we hit the investment case for space from five different angles, both public and private.

5. S&P free cash flow: better-than-expected. Given the trend of AI capex spending, one could be excused for worrying about a drop in FCF generation by US corporates. With appreciation for all that's changed with the hyperscalers, Ben Snider made a broader point this week that surprised me: for S&P (ex- financials), FCF actually grew > 30% y/y in H1'26.

6. The rally back in software. With credit to tech specialist Pete Callahan, I thought this was an interesting take on one of the bigger stories of recent weeks, as it parses what's playing out beneath the hood of the sector:

The Software sector just got back to FLAT on the year ... while there is plenty of investor interest in parts of the sector (data infra / tools + security) -- accompanied by some "fresh-ness" to idea generation in these areas (e.g. different than the 3 years of AI / Semis investors focused on) -- investor sentiment in SaaS had yet to inflect (despite the recent moves & headlines). For a check-down on YTD action: security up ~80- 100% YTD (PANW, FTNT, OKTA, CRWD) ... consumption up ~50-80% (DDOG, SNOW) ... names that are (surprisingly ... ?) unchanged on the year / up small (CDNS, Unity, MSFT, TEAM, PATH, WDAY, MDB) ... the names that are still big YTD laggards (INTU -45% YTD, HUBS -40%, CRM -24%, ADBE -22%, NOW -17%, ADSK -13%) ... yes, a big focus on upcoming off quarter earnings.

7. Another strong week in Japan. As mentioned along the way, TPX took out the highs, and is now stronger in eight straight sessions. The rally has been earnings-driven and led by the banks (as the

probability of a September hike climbs to ~ 75%). In my reading this week, two notes to flag:

i. For another example of how Japan has broken out of a multi-decade deflationary trap, domestic loan demand has surged to 26-year highs.

ii. For a check-down of how the shareholder reform / ROE story continues to genuinely unfold.

8. A final thought. On one hand, it's hard not to be impressed with the resilience of the US market. You don't need me to tick off the worries, but there have been plenty of them at various turns in 2026, and S&P keeps rolling with the punches. With that said, one can argue that IT BETTER BE. What do I mean by that? Well, we're running a ~ $2tr budget deficit at full employment. Furthermore, there's ~ $1tr of AI capex moving through the economy. So, yes, there are headwinds that the market has impressively fought through -- but, I don't think we should give short shrift to some extraordinary tailwinds that have also been in the mix. There's no great moral to this story, but it speaks to a powerful set of countervailing forces at work within and around the market today. And, to connect back to the opening paragraph, we're trading through wildly interesting times.

9. One chart for the road. As global rates continue to broadly grind higher…