GS Pasquariello markets macro 7 Sep 2026

GS Pasquariello - markets macro 7 Sep 2026 Tony Pasquariello · Goldman Sachs · FICC & Equities / Markets Mon 7 Sep 2026, 11:08am ET

with a touch of distance from the screens, here's a short set of market developments that caught my eye during the past week:

1. point-to-point, it was a decent summer, and the primary bull trend remains intact. from Memorial Day through Labor Day, US equities performed fine: cap-weighted S&P +4%, equal-weighted S&P +7%. as has been the case all year, however, each month was its own distinct ecosystem. furthermore, a snapshot of index-level returns totally obscures some tumult beneath the surface of the market, as the momentum factor was properly upended. it's here I'll note that our TMT momentum pair just printed its worst two months on record (and has been halved since the highs of June).

2. looking ahead, we're entering into a stretch that is very catalyst rich: central bank binaries (could the BOJ go 50 bps; will the Fed go at all) ... a midterm election cycle (which typically brings a firming of volatility over the next two months) ... ongoing, if constrained, kinetic warfare in the SoH (as European gas and refined products keep pushing higher) ... to say nothing of the remarkable step changes in applied innovation and historic capital markets activity.

3. as you've no doubt heard by now, September tends to be the single worst month of the year for US equities (and midterm election years are particularly iffy). regarding the near-term, here's what's coming to a macro theater near you: the UST will announce buyback sizes on Wednesday ... then we get PPI on Thursday ... followed by a pivotal CPI on Friday. alongside this, I'll be watching ORCL earnings on Thursday and our landmark TMT conference.

4. despite all that lies in front of us, a bright-and-shining feature of the current landscape is low implied volatility (we walked out of the office on Friday with the VIX sitting just above YTD lows). to say it again: whether it's a micro or a macro risk, whether you want to throttle up or throttle down, the cost of owning options is certainly NOT prohibitive right now.

5. when stepping back from the day-to-day noise, it's hard not to be a little contemplative about the trajectory of US debt and deficits. while these concerns have washed in and out of market focus for several years -- and there are some opposing arguments worth considering -- the fact is the underlying math has only deteriorated. now, as distinct from past occurrences -- notably the one that took place in late 2023 -- I find it interesting that the current episode has NOT seen a marked increase in interest rate volatility. in the end, I come out here where I came out on the prior point: collect some cheap convexity when the market offers it to you.

6. on the Fed: however you choose to characterize what was said over the past two weeks, the core of the committee appears to be highly data dependent, which suggests this week's news will seal the decision for next week. away from the will-they-or-won't-they obsession with September FOMC, the bigger question

for stock operators to confront is whether a sustained hiking campaign is set to unfold or not. to be sure, the house view is the Fed will be sitting on their hands for a while longer.

7. on Iran: a seemingly unsustainable situation ... sustains. recent weeks have seen elements of escalation, yet the boundaries seem fairly well defined. on one hand, if you were to simply observe the price of TTF (+150% YTD), time is still very much the enemy. with that said, this surprised me: accounting for dark crossings, total oil exports through the Persian Gulf are running at 15-16mm bpd, which is about 2/3 of where things stood before the war (link). furthermore, whether you agree with it or not, the pattern of fact is this: stocks more or less moved on from Iran as a primary variable at the end of March.

8. speaking of things that surprised me, Q2 saw $99bn of fundraising for private credit strategies, which is a record high (link).

9. speaking of out-of-consensus developments: heading into last week, the software sector had outperformed NDX for five straight weeks, which was the best streak in the…