Here Are The 10 Key Factors Goldman's Trading Desk Is Looking At

With the market's attention swinging wildly like that of a horny, schizoid ADHD-addled teenager from earnings, to the Fed, to bond supply, to the AI bubble, to the latest manufactured geopolitical crisis, it's easy to get lost in the discordant symphony noise. So to help traders regain some focus, here courtesy of Goldman trader Michael Nocerino, is a snapshot of the 10 key factors the Goldman trading desk is looking at today.

FACTOR FOCUS…

• US DESK ACTIVITY: Overall executed flow on our desk ended with a -50bps sell skew vs 30d avg of -91bps. Flows tilted better for sale though were benign in nature. Long onlies finished -5.9% net sellers, driven by supply in info tech, HC, Staples, and Materials. HFs finished -1.8% net sellers, driven by supply in Discretionary, HC, Energy vs demand in Materials and Industrials.  
• FEB 5 TRADING RECAP: SPX closed at new ATHs despite a choppy week, and market breadth was decent with 284 SPX names finishing higher. Our franchise saw net selling from LOs to the tune of $600mm, bringing the YTD net selling to $6bn. Sector flows showed money coming out of Energy, Comms Svcs, Materials, and going into Tech, Health Care, Staples, and Financials.
• RATES: Rate moves : While end point for rates may not have changed (lower front-end, steeper curves), the FI mkt feels fragile near term. Growth data undeniably strong, Fed reaction function is convoluted, Feb is a heavy month of UST and corp supply, and positioning in rates still skewed quite long.
• CHINA: China Support: multiple headlines including China’s sovereign wealth fund increasing ETF holdings, CSRC supporting firms increasing buybacks, and reports President Xi meeting with financial regulators to discuss stock mkt (more stimulus coming?). Mkt also feels deeply oversold from a positioning standpoint – can increased support change the structural narrative of lagging growth/a lingering property crisis?
• CRUDE: Oil prices held broadly steady on Tuesday as investors waited to see whether a Middle East trip by top U.S. diplomat Antony Blinken will bring a halt to the Gaza war, which has raised concerns about supplies from the major producing region.
• POSITIONING: the technical piece is where things get more challenging: the trading community is a bit long ... the short base in index products has been smoked.
• BUYBACKS: the largest technical in the equity market is corporate stock repurchase, and we’re just entering the open season for the biggest buybacks to resume.
• SEASONALS: the monthly seasonals shift from good to bad.
• TECHNICALS: RSIs are stretched.   
• IT'S ALL MAG 7... STILL: Call buying across the Mag7 complex last week hit levels not seen since the fervent tech rally in early 2023; continued strength in NVDA +4.8% on Goldman's price target increase to $800 on robust AI server demand and improving GPU supply, closing at a new ATH for the third straight session.