In his latest note to clients, Goldman Sachs head of hedge fund coverage reduces the current trading environment to a sequence of one-liners:

• S&P has rallied for six consecutive weeks -- the longest streak since a scorching run into the end of last year -- as US equities continue to trend higher.  

• For what it’s worth, since that prior rip began back in October of 2023, S&P has added 1,725 handles (aka +42%, that surprised me).

• Alongside the path this week, we’ve seen an ebbing of some recent tensions: oil retreated and implied volatility eased. 

• To be more precise, S&P has seen moments this week of both melt up AND retracement -- it’s been more of a seesaw than a freight train, but the flow of capital is still clearly supportive.

• In that regard, to say it again, this is both a bull market AND a trader’s market.

• Dispersion remains a bright and shining theme and there’s plenty of action below the hood right now -- most interesting to my eye is the recent move in cyclicals-over-defensives (see ticker GSPUCYDE).  

• Plenty of smart folks will disagree with this, but I continue to believe the US consumer will defy the bears (as evidenced by both retail sales and US bank commentary).

• Away from the US, Chinese equities struggled a bit for the second consecutive week -- as discussed in point #1 below, some skepticism has crept into that trading narrative.  

• European equities remain on the back foot as some very high profile earnings misses took a clear toll on SX5E (the one impressive exception is the power space, see GSXEPOWR).    

• With a break over $2,700, price action in gold remains superb -- this is an asset that is whatever you wish it to be, and I’m certainly not looking to pick a fight with the underlying demand story. 

• In sharp contrast, if oil can’t sustain a bid in this geopolitical environment, nor in the context of a US reflation theme, the market is showing its hand.

• Finally, the dollar has been on a flagpole this month, yet the broader index of financial conditions is NOT tightening ... good.

Below are bigger picture developments that Pasquariello is paying particular attention to...