TREE NEWS reports: Goldman Sachs global head of hedge fund coverage Tony Pasquariello expects the S&P 500 to complete one last leg higher before 2027 brings the largest net equity supply shock since 2000, driven by large IPOs including SpaceX and Anthropic and corporate cash shifting to capex over buybacks. He said earnings growth, fund flows and the AI narrative have all deteriorated at the margin, and flagged the Nasdaq 100’s 6.36% single-day drop this week.
Goldman’s Pasquariello sees final S&P 500 leg up, then 2027 supply shock
Pasquariello's call is notable less for its bullish tail than for its supply-side framing: the risk into 2027 comes not from demand fading but from a wave of new paper and a shift in corporate cash from buybacks to capex, which changes the market's structural bid. The admission that earnings growth, flows and the AI narrative have all softened at the margin sits awkwardly beside the expectation of one more leg higher, suggesting the setup is late-cycle rather than fresh. Whether that supply shock actually materializes on the stated timeline, and whether the recent Nasdaq drawdown proves a one-off or the start of something more durable, are the open questions.
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