GOLDMAN SACHS TRADER: BUY THE SEPTEMBER DIP.
Goldman Sachs macro trader Paolo Schiavone advises buying September’s stock dip, predicting the S&P 500 could climb to 6,700–6,900 as rate cuts boost growth.
In a note issued before the latest jobs report, he said markets are already pricing in a Fed cutting cycle that will spur economic re-acceleration. August jobs growth was just 22,000 vs. 75,000 expected, with unemployment at 4.3%. The weak data pushed the dollar lower, yields down, and stocks higher.
Schiavone sees the Fed’s long-run rate near 3%, similar to the ECB, and expects stretched valuations in credit and equities to persist. He recommends owning rates volatility, buying equity dips, and watching Nasdaq and Russell indexes for signals.
He also warns of risks from “fiscal dominance,” where central banks lose independence, which could raise front-end rates and stagflation risks. For now, he stresses that incoming data must “carry the load.”