Flow and Positioning Observations

The report highlights a transition in AI investment as capital rotates from mega-cap tech into broader semiconductor and hardware firms. Market structure shows record leverage, and investors are shifting focus from geopolitical energy risks to Fed policy.

Key Takeaways

• 1.AI remains the primary driver of market sentiment and capital allocation, despite rotation from mega-cap stocks into the broader AI ecosystem.
• 2.Market structure is characterized by increased leverage and volatility, as hedge fund net leverage reaches 4-year highs.
• 3.Macro factors have returned to focus, with the bond market reacting to hawkish shifts in Fed policy and geopolitical risk premia in energy receding.

Table of Contents

• GS flow and positioning observations
• Richard Privorotsky – EMEA head 1D trading
• Lee Coppersmith – Derivatives NY

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