Goldman Sachs market survey: Entering September, US equity bulls continue to bet on AI, bears worry about growth and concentration, and everyone is bullish on gold.

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Entering the traditional “eventful autumn”, the market sentiment among global institutional investors is showing a clear split.

According to Trading Desk News, on September 6, the latest survey report from Goldman Sachs’ markets division shows that the bulls continue to chase the rally of artificial intelligence (AI)-driven technology stocks, while the bears are becoming increasingly wary of slowing economic growth and market concentration risks.

Amid these differences, a strong consensus has emerged: regardless of being bullish or bearish, going long on gold has become the common choice for everyone. Meanwhile, the focus on the Chinese market remains high, with 62% of respondents planning to maintain or increase their allocation to Chinese equities.

Bull-Bear Split: Coexistence of AI Faith and Growth Concerns

This survey of 804 institutional investors shows that despite overall risk appetite having improved compared to last month and recession fears continuing to subside, two major camps have formed within the market. The bull camp remains optimistic about US stocks, particularly the “Magnificent 7”, believing the AI narrative is far from over.

More than half of the respondents said they plan to maintain or increase their long positions in the “Magnificent 7”. However, there is a slight decline in new capital flowing into this trade, indicating subtle changes beneath the heat.

On the other hand, the bears’ concerns about risk are also clear. They are mainly worried that the US economic slowdown could exceed expectations, as well as the concentration risk caused by large tech stocks dominating the market.

Regarding the latter, investor opinions are also split: 46% of respondents expect the divergence between large caps and the rest of the market to intensify, while 38% expect this divergence to diminish.

Gold Is King: Long Sentiment Reaches Record High

Notably, among various asset classes, gold has become the least controversial choice.

According to the survey report, the ratio of gold bulls to bears reached almost 8 to 1. This is the first time gold has become the most popular long trade in Goldman Sachs’ survey, its momentum described as “unprecedented,” even surpassing developed market equities.

The report analyzes that whether bulls expect the Fed to start a rate-cutting cycle soon, or bears worried about the Fed’s independence seeking a safe haven, both regard gold as an ideal allocation. In addition, demand from central banks of various countries and potential private investors has jointly pushed long gold sentiment to new highs.

Chinese Market under the Spotlight, Dollar Consensus Reemerges

The survey also shows that investor interest in the Chinese market is rebounding.

When asked which would perform better this month, US stocks (S&P 500) or China stocks (MSCI China), investor views were almost evenly split, indicating attention towards the Chinese market is now on par with US stocks.

Data shows that as many as 62% of respondents plan to maintain or increase their positions in China’s stock market. This reflects the market’s increased appeal after a strong summer rebound, but the report also points out that some recent market dynamics have cooled part of investors’ enthusiasm, raising concerns about potential pullback risks.

In addition, the dollar’s trend has also become a focus again. After a brief rebound last month, consensus for shorting the dollar seems to have returned to the forefront. However, regarding the key factors driving the dollar’s trend for the rest of the year—whether interest rate differentials, Fed policy, or the diversification of global reserves—investors have not yet reached a clear consensus.

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The above content is from Trading Desk.

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