GS Pasquariello markets macro 25 Aug 2026

GS Pasquariello - two levered hot spots: semis vs software and momentum 25 Aug 2026 Tony Pasquariello · Goldman Sachs · FICC & Equities Tue 25 Aug 2026, 12:04pm ET

here are a couple more charts to consider on a late August afternoon. the focus today is on two (interrelated) hot spots within the levered community: semis vs software AND the momentum factor. both stretch back a full ten years and are sourced from the GS PB data set (credit = Erin Tolar).

1. this illustrates client length in a specific industry group, measured as a percentage of our entire PB book. the green line is semis (and semi equipment); the red line is software (and IT services). note the longstanding pattern of trading as the photographic negative of each other. the chart speaks for itself: that inverse relationship went into overdrive in the second half of last year as the market started to press very hard on the AI enablers-vs-disrupted narrative. the fever broke in recent months, which is partly a positioning story (e.g. the July deleveraging) and partly a fundamental story (i.e. there's a more 2-sided debate now within software). my guess is this wedge will retain some structural width, but will also be subject to plenty of ebb-and-flow along the way given the concentration in capital here:

2. this looks at positioning through the factor lens. it specifically measures client exposure to momentum over the past ten years. again, the chart speaks for itself: as the actual performance of the momentum factor trended from the lower left to the upper right over those ten years -- most pronounced in the past couple of years -- clients steadily dialed up their leverage to it. and, for good order's sake, the prior chart is part and parcel of this chart (i.e. long semis / short software defined the edges of the momentum pair). in

turn, I come out here where I came out there: as long as the AI buildout remains on track, client exposure to this factor will run on the structurally higher end of history, but with that comes a more volatile path:

Source: Goldman Sachs FICC & Equities / GS Prime Brokerage (Erin Tolar); GIR, as of 25 Aug 2026. Past performance is not indicative of future results.