GS Privorotsky Basics Micro vs Macro. Europe. ARC AGI 3. 7 Sep 2026

GS Privorotsky - Basics Micro vs Macro. Europe. ARC AGI 3. 7 Sep 2026 Rich Privorotsky · Goldman Sachs · Equity Sales / US Mon 7 Sep 2026, 3:11am ET

Markets: NFP first. August payrolls came in +162k versus roughly +53k expected, with unemployment unchanged at 4.1%. There are some seasonal/payback elements after the softness earlier in the summer, but net net this was a firmer report. Yields moved marginally higher in the front end repriced the Fed, although the long end is stable (buyback announced maximum size to come on the 9th). Net… more pressure on the Fed heading into Friday’s CPI, which now feels pretty binary. September hike odds are back around 60%. A benign print gives them room to wait; a hot core print probably solidifies hike. That feels like the main risk overhang into the end of the week (that said we've got 60bps of hikes priced to year end...we could go to 75 as we mechanically reprice Sept but given strong nominal growth think equity remains resilient) .

Oil remains the biggest macro problem. Brent is back around $97, tanker traffic through Hormuz has fallen to its lowest since May and diesel remains particularly problematic. We are also getting closer to the point where European winter gas inventories matter more. The SPR is down to roughly 287m barrels, so the policy cushion is much smaller than it used to be. The US is clearly trying to keep routes functioning, including a months long effort to clear mines, while Iran is now threatening a more formal restricted zone around the Strait. On the face of it, things look bad. But I keep trying to skate where the puck is going. Iran’s maximum political leverage is probably now, ahead of the US political events, while the US also has a strong incentive to get energy prices lower. Evidence of real diplomatic progress remains thin, but the incentive window is obvious. My gut still says there is scope for some kind of diplomatic headline because the pressure on both sides is becoming acute.

AI: Astra feels important (see below). Appears significantly more token efficient on a number of agentic workloads, which means cost per completed task can be materially better at the frontier. More importantly, the capability jump is real (see Softbank up 10% again). For markets, I think the read through is pretty simple… better models reduce friction, improve economics and encourage more usage, which ultimately supports more infrastructure spend. The speed at which models are improving is quite impressive its clear that the leap from one generation to the next is happening at an exponential pace. Positive for the broader AI chain and another reason not to be a hater on tech/AI here.

Europe: AfD won 43.8% in Saxony-Anhalt and took 39 of 83 seats, just three short of an outright majority. The win itself was expected, although the final number was slightly stronger than the roughly 40–41% polling beforehand. Expected. Question is whether this should light a fire under the German establishment to deliver it's growth/reform agenda? France is more worth paying attention to as we begin budget debates: Jordan Bardella, head of the far right National Rally party, “What is certain is that in this budget we will very firmly oppose tax increases — increases in taxes on French people\" (BBG) Watch OATs.

Week ahead: plenty to sink our teeth into. PPI Thursday, CPI Friday, ECB Thursday, Apple Wednesday, then Oracle and Adobe Thursday, alongside a very busy week of TMT conferences including our own Communacopia. Apple potentially unveiling the foldable makes that event unusually interesting, while Oracle is clearly important for the AI infrastructure ecosystem and Adobe gives us another software data point. The ECB looks nailed on for 25bps. The interesting question is whether this ends up being a dovish hike or a hawkish one. Market pricing of 3 hikes feels ambitious/fully priced...

Risk: Micro is getting more encouraging while the macro is getting harder. AI capability is accelerating, the conference/earnings calendar should produce plenty of positive TMT data points and Asia tech is already trading very well. Against that, energy is objectively problematic and inflation/rates are back in…