Goldman Sachs: Trading Desk 01/06/2024
S&P rose 55 basis points (bps) , closing at 5975 with a MOC of $1.75 billion to buy. NDX rose 109 bps to 21559 , while R2K fell 8 bps to 2266 and the Dow retreated 6 bps to 42706. 17.3 billion shares were traded across all US equity markets, versus the year-to-date (YTD) daily average of 15 billion shares. The VIX was down 56 bps at 16.04 , crude oil was up 65 bps at 73.48 , the 10-year Treasury note was unchanged at 4.61 , gold was down 13 bps at 2636 , the DXY index was down 63 bps at 108.26 , and bitcoin was up 389 bps at 102310.
Welcome to 2025, stocks rose, driven by the technology sector thanks to:
A blog post by Sam Altman about AGI (Artificial General Intelligence) and “superintelligence.”
Foxconn/Hon Hai's strong Q4 revenue numbers.
Microsoft 's announcement Friday of its plan to spend $80 billion on AI-related data centers by fiscal year 2025.
Anticipation for Nvidia/Jensen Huang's keynote tonight at CES.
In other news, Trump 2.0 promises to be just as turbulent as his first administration, with conflicting headlines, including Trump 's denial of initial Washington Post reports about his team's scaling back of tariff plans.
The LO community was extremely active buying semiconductors from the start of the day (HF flows were more balanced). Seasonal and technical factors from the beginning of the year remain favorable after the sell-off in late December. January remains the most important month of the year for equity inflows. From a factor perspective, valuation, size and growth tend to stand out. This data from our PB team is important: nominal net selling of US macro products last week was the largest in the past year, ranking in the 98th percentile in a 5-year analysis. Shorts in US-listed ETFs increased by 7.1% (+17.5% month-on-month), led by large-cap stocks, corporate bonds, technology and healthcare.
Tomorrow begins our highly anticipated two-day Energy, Cleantech and Utilities conference, with 110+ participating companies , 5,700+ meeting requests and 850+ investors. Top requested meetings include: CVX, LNG, COP, EQT, OXY, FANG, NEE, CCJ, ENPH, EXE. Key takeaways from the conference: positioning, charts and insights. Get in touch for more details. Conference website: Link ; Agenda: Link.
As we enter conference season, keep this in mind: January is typically the busiest month for pre-announcements each year. Our analysis of 8,000+ pre-announcements since 2011 reveals that approximately 26% of all pre-announcements occur in January. Of these, more than 60% come from the healthcare or consumer discretionary sectors.
Our floor activity was a 6 out of 10 in terms of overall activity levels. Executed flows ended up +8% versus the 30-day average of -407bps. LOs closed as net buyers of $1.5 billion , driven by macro, financials and technology. HFs ended as net buyers of $300 million , driven by financials, consumer discretionary and communication services, in contrast to the offering in energy.
DERIVATIVES: Clients were active early today in anticipation of the CES conference and Nvidia ’s keynote tonight. There were a significant number of short-dated call/call spread buyers on our desk, with NVDA volumes rising to 4.2 million call options traded today versus the 10-day average of 2.25 million. This flow was consistent across a number of names, and SPX flat volatility was also sought. We entered the year with the S&P dealer gamma long at just $1 billion , a reduction in the position that has coincided with larger intraday swings (10-day trading band = ~1.30%). With the week shortened, the Friday afternoon straddle, which captures the NFP report, is pricing in a 1.17% move. (h/t Pat Grahling)