Weekend Prep

This Goldman Sachs update analyzes the market's 'look-through' of the Iran conflict and the extreme concentration of hedge funds in the AI trade. It highlights record-low index correlations and a surge in gross leverage as key technical drivers for the week ahead.

Key Takeaways

• 1.The AI trade remains the dominant momentum factor with hedge funds carrying a 90th percentile tilt and heavy concentration in semiconductors.
• 2.Markets are 'looking through' the Iran conflict, creating potential squeeze opportunities in sectors like retail, discretionary, and travel.
• 3.Index implied correlation has reached all-time lows, prompting recommendations for reverse dispersion or volatility swap structures.

Table of Contents

• some thoughts
• pb (i)
• pb (ii)
• cash
• futures
• derivs (i)
• derivs (ii)
• derivs (iii)
• baskets
• marquee
• Indicative Terms/Pricing Levels
• Notice to Australian Investors
• Notice to Brazilian Investors
• Notice to Investors in Japan
• Notice to Mexican Investors
• Notice to New Zealand Investors
• Notice to Swiss Investors
• Notice to Investors in Korea
• Additional Disclaimers

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