Markets and Macro

Latest edition · July 22, 2026

GS Tony Pasquaariello - markets and macro

The market is currently undergoing a structural shift characterized by record-high momentum volatility and a more critical debate surrounding AI infrastructure investments. Investors are advised to simplify portfolios as higher-velocity trading conditions persist through the summer.

Tony Pasquariello highlights a marked change in market character, noting that the momentum factor has experienced its highest volatility in 45 years outside of recessions. This volatility is underpinned by a transition in the AI trade from speculative euphoria to more complex fundamental scrutiny, alongside structural changes like the rise of ODTE options and levered ETFs. Given that the S&P 500 remains highly concentrated and market leverage appears excessive, the desk expects higher factor volatility to persist, recommending that investors reduce portfolio complexity during the summer months.

Key takeaways from the latest edition

• 1.Momentum factor volatility has reached multi-decade highs, driven by excessive speculative positioning and a shift in market structure.
• 2.The AI narrative is shifting from a simplistic 'pick-and-shovel' trade to a more complex debate regarding capital intensity and terminal returns.
• 3.Current market architecture, marked by high index concentration and the use of ODTE options/levered ETFs, is contributing to sustained factor volatility.

What this series covers

• Market Environment and Momentum Factor
• AI Infrastructure Narrative
• Market Structure and Volatility
• Strategic Conclusion

Edition archive

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  July 22, 2026

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  July 1, 2026

• GS Tony Pasquariello - markets and macro(1)

  June 27, 2026

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