Goldman Trader Says Wall Street "Uninvestable" as Momentum Unwinds Despite Steady S&P 500

Goldman Sachs senior macro trader Bobby Molavi said the past two to three weeks have left markets essentially "uninvestable," with index calm masking violent rotation inside institutional portfolios, according to the bank's "Ruminations" note. The S&P 500 sits near record highs and earnings remain resilient, yet popular strategies are enduring crisis-like drawdowns. The Nasdaq fell more than 6% over two weeks, semiconductor shares saw heavy selling and momentum strategies dropped about 15%. Goldman's AI stock basket has retreated more than 20% from its peak relative to the S&P 500 excluding AI names — its second drawdown of that magnitude. On October 22, hedge funds posted their fifth-largest deleveraging of 2026, driven entirely by long selling and the biggest long liquidation since September 2025. Goldman's momentum pair basket has fallen about 43% from its high, near the deepest on record, and has logged 30 trading days of moves of 5% or more this year — versus 23 in 2000, 16 in 2009 and 21 in 2020 — even as the VIX averaged just 18.1. Investors are rotating toward quality: Goldman's US quality basket is at a 12-month relative high, up about 6% since mid-August while the equal-weight S&P 500 fell nearly 4%. About 61% of S&P 500 members now trade above their 50-day moving averages, the highest since August.