Excellent video from $GS on the current state of the equity market. An interesting comment from Flood is that they are managing ~50 live corporate buyback programs now versus ~10 live at any given point in years past.
https://t.co/89QtlEU8rQ
As US equities get more volatile, are the drivers of the rally still intact? John Flood, head of Americas Equities Execution Services in Goldman Sachs Global Banking & Markets, breaks down the market action, and explains why strong earnings and positive technicals could drive stocks higher, in this conversation with Chris Hussey.
BOTTOM LINE
[INFERENCE | High] This is a tactical pro-risk / buy-the-dip call, not a new bottom-up stock thesis. The most investable read-through is that Goldman’s trading desk sees enough demand absorption, earnings momentum, and technical support to keep leaning into momentum, especially semis and semi equipment, while using late-June/early-July mechanical weakness as an entry point.
KEY POINTS
[FACT] John Flood says the market remains in “buy dip mode” despite renewed volatility. He attributes part of the volatility to Russell rebalance dynamics and says a recent session saw 34B shares trade across US equity exchanges, which he frames as the most active trading day in US stock-market history.
[FACT] He says two high-profile June offerings represented $140B notional and that the stock market “didn’t blink.” His read is that institutional demand was significant and retail buying is accelerating after the IPO supply.
[FACT] He says corporate buyback demand is broadening. On Goldman’s buyback desk, he says an active day was ~10 programs two years ago versus 50-60 programs this year, and he expects a record repurchase year by notional dollars and number of companies buying back stock.
[FACT] Preferred theme remains semis and semi equipment. He specifically calls out semis, memory, Asia/Korea/Taiwan exposure, and says crowding can cause volatility but the trend still points higher.
[FACT] He also sees “attractive entry points” in Mag7 because hedge funds have been shorting Mag7 and using it as supply to make room for semis, tech, and IPO paper.
[FACT] Rates are the main macro risk. He says the market is pricing ~40 bps of hikes by year-end, and that higher inflation / higher-than-expected rates are the key threat that could break the market.
[FACT] Earnings are the core bull-case anchor. He says Q1 median stock earnings grew 14%, one of the best quarters in decades, and Q2 expectations are for ~9% YoY median earnings growth. If Q2 clears that hurdle, he argues fundamentals still support the move higher.
[FACT] Favorite trade: keep leaning into what is working. He explicitly says high momentum is crowded “for a reason,” likes semis/semi equipment, and thinks the S&P 500 has a real chance to break above 8,000 in the near term.
PM READ-THROUGH
[INFERENCE | High] The strongest signal is not “Goldman says buy stocks”; it is that supply absorption is better than feared. Large primary issuance, broadening buybacks, retail demand, and institutional appetite are all pointing in the same direction. That matters because bears keep arguing supply/valuation/crowding should cap the market. Flood is saying the tape is absorbing it.
[INFERENCE | High] For TMT, this supports staying long the AI/semi momentum complex until earnings breadth or rates invalidate it. The transcript specifically reinforces semis, semi equipment, memory, and Asia-linked AI supply-chain exposure. It also argues against fading the Mag7 purely because some capital is rotating into narrower semi winners.
[INFERENCE | Medium] The best trade setup may be tactical: if June 29-30 pension rebalancing creates equity selling because stocks outperformed fixed income, he views that weakness as a buying opportunity. I would use that as a timing input only, not a reason to add risk blindly.
[INFERENCE | Medium] Mag7 could be the relative catch-up trade if hedge-fund shorts and source-of-funds selling reverse. The cleaner expression remains semis/semi equipment, but the more contrarian angle in this transcript is that Mag7 weakness may be flow-driven rather than thesis-driven.
WHAT WOULD BREAK THE THESIS
[FACT] Flood himself names higher inflation / higher-than-expected rates as the main market-breaking risk.
[INFERENCE | High] If the market moves from pricing ~40 bps of hikes to a more aggressive tightening path, the “hold acts like a cut” argument fails.
[INFERENCE | High] If Q2 earnings do not clear the ~9% median-growth hurdle, the core fundamental support weakens quickly.
[INFERENCE | Medium] If semis/memory/Korea/Taiwan volatility becomes forced de-grossing rather than ordinary crowding volatility, this becomes a crowded-positioning warning instead of a buy-the-dip setup.
[INFERENCE | Medium] If IPO supply keeps expanding but retail/institutional demand fades, the “market didn’t blink” point becomes stale fast.
ACTIONABLE TAKEAWAY
Use the episode as a pro-risk flow check: stay biased long semis/semi equipment and AI infrastructure momentum, watch Mag7 for flow-driven entry points, and treat quarter-end rebalance weakness as a possible add window only if rates and Q2 earnings revisions stay supportive. Do not treat this as a durable valuation defense; it is a momentum/flow/earnings-continuation argument.
