Goldman Asks "Is There A More Interesting Chart On Planet Earth Right Now"


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In his exhaustive Q1 lookback and post-mortem, Goldman's Tony Pasquariello  (global head of Hedge Fund Sales, which these days we assume excludes family offices for obvious reasons) whose work we have profiled extensively in the past, discussed how much has changed in the past quarter, in which while stocks continued to ramp and closed 6.2% higher there was unprecedented turbulence below the surface, and is why he writes that "certain impulses changed as the quarter wore on, which presents a different setup for Q2."

In any case, while we will look at a detailed analysis of all that happened in one of the most unforgettable quarters in history (and they said 2021 would be much quieter than 2020), here are the seven most important market charts to follow according to one of the people who is most critical in setting the narrative at Goldman.

1. Pasquariello starts with the latest fund flows, where he notes that on one hand the market has seen record inflows to equity funds to start the year, yet at the same time that really only marks a reversal of outflows in the prior few years (and also takes place during a burst in market volatility as discussed in "Another Market Paradox: Wall Street Struggles To Explain Record Equity Inflows Amid Stock Turmoil"). According to the GS trader, while retail demand is apt to slow from a white-hot pace, it should on net remain positive "as equity funds take from both bond funds and the money markets":

2. Looking ahead, Pasquariello says that Goldman's composite score for the bank's proprietary US reopening scale will be critical to watch in the coming months, as the US gets closer to normalcy with every passing day.

3. In turn, the Goldman trader thinks "this is a very interesting chart": the blue line is a custom basket of stocks levered to the stay-at-home theme (GSXUSTAY), expressed as a ratio vs S� the white line is a custom basket of stocks most exposed to the pandemic (GSXUPAND), also vs. the S&P.

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