Organizing the seven main thematic logics of the market, Goldman Sachs outlook for the future: rate cuts continue, the bull market in US stocks does not stop.

Goldman Sachs' global head of hedge fund client relations, Tony Pasquariello, has outlined seven key themes shaping the current market. Firstly, Pasquariello pointed out that the recent market trends have been mainly driven by the October FOMC meeting of the Federal Reserve, which became a key catalyst and fundamentally changed the existing trading patterns. During the week of the meeting, retail investors' enthusiasm for stocks reached its peak, particularly evident in the demand structure for highly liquid stocks and short-term call options. At the same time, Pasquariello expects the Federal Reserve to cut rates in December, which will improve liquidity, and predicts two more rate cuts next year. He emphasized, "The bull market will not end during a rate-cutting cycle." Additionally, Pasquariello mentioned that last week both hedge funds and real money investors "threw in the towel," which may indicate that the market is improving rather than continuing to decline. Goldman Sachs' economic team forecasts GDP growth rates in the range of 2.0% to 2.5% next year, with favorable prospects for risk assets. Pasquariello noted that the market sentiment towards growth prospects has shifted from slightly overly optimistic to somewhat overly concerned on the margin; despite worrying signs such as a recent 8.5% unemployment rate among college graduates, economic data showing unexpected improvement is gradually emerging. He also observed significant rotation between real money and hedge fund investors, shifting from the technology sector to the healthcare sector. "I don't know how long this rotation will last, but if the profit inflection point is upward, I think there is still plenty of runway in this area." He added, expecting such sector rotation to become a norm in the coming months, rather than a random occurrence. Regarding gold and bitcoin, he stated that since the "October 10th turbulence," the two have mostly moved in the same direction (both up and down) this year. However, there has recently been a divergence gold has held its ground while bitcoin has collapsed. "Bitcoin has no intrinsic value or yield, so its price is mainly driven by narrative and capital flows. The fact is: bitcoin is clearly being heavily sold off, while gold continues to be accumulated," he concluded. Finally, considering that mega-corporations are expected to reach capital expenditures of $614 billion by 2027, Pasquariello believes AI infrastructure providers have huge opportunities. He said, "I still don't want to go against the trend of capital flowing to AI infrastructure providers. However, I am cautious about the market's enthusiasm for this trend in the future, and I am currently lowering my expectations for how much market excitement this trend will generate."