Welcome to our exchanges at Goldman Sachs, Marcus Update for Friday October 16th. Each week we check in with later cross the firm to get a quick take on what they're, watching in markets on Jake Seaworld global head of corporate communications for the firm in joining us. Today we have one of my favorites tony Basque Lorella on from our global markets. Division Tony welcome back to the programme being shaped with it. A fax training up recently, what's driving that in power up domestic, our investors today on Friday tourists extent. So really it's a bit of a mixed bag right now, Jake following a spectacular rally. Last week, we were action. after a very strong start to this week. In fact, the NASDAQ one hundred which will come back to camp in about two percent of its all time, high that it set back during a very strong rally in the month of August. I think the strike that we saw in the market, which essentially culminated on Monday and Tuesday morning. It was written by a few factors. At argue. The most important driver was on the margin,

some relaxation by investors around the notion of a contested. U S election. As recently as three weeks ago, there was a narrative in the markets that was increasingly possible, if not probable, that the outcome of the race would not be known an election night itself. In fact, the volcanic could spill answer late November, even December, perhaps culminating in the Supreme Court decision, which we saw surely backing two thousand since then, if you observe various third report on this issue- and we like to reference the super forecast for data from the good judgment project, for example, the public seems to the market seems at conference today that it can test elections, in fact not the base case, and so I think there is some reassurance there for traders, many investors, you could see some without relaxation, for example, and the ESA the options market by was interesting- is the weak war on became under some pressure decent brush on Wednesday and Thursday, as we speak today. Yes, is more or less flat, where was last Friday,

alongside a continued failure to pass the dishes fissile supporting you ass to my eye, the primary driver of that kind of interweave sell off centred around. In tell me if this runs a bell, worrisome news flow around the spread of covert in Europe, and so here this week has seen a resumption in case growth in Europe and in turn,. a set of measures to limit interaction, if not so, to be locked down certain parts of the continent. Of course, the pandemic. It's not a new variable for the mark contend with, but when you begin see policy that major every impinge on economic activity. The risk markets dont like that, and indeed it was the sickle parts of europe- inequity complex that, let us more it's been a long strange trip for sure. Let's go to the big picture for a second, I mean how are markets doing year to date, obviously been a lot of fluctuations, and how does that compare put it in historical context, plus so in a line that yours, equity markets doing very well with some

very significant dispersion under the hood, which again is a point, will come back to a high level? Yes, M p. Five hundred returned around eight percent here today, which is about right in line with its long term average for a full year now, what's interesting about us about how it is realize volatility. Ok, how much is the market actually been movie? that measures at thirty four percent, which is actually in the ninety seven percent I'll on a long run history. So yes, the market as point to point generated a very decent headline, return of the volatility that investors that face along that path is some of the very highest recorded and then, as I mentioned, there's been a very wide dispersion of returns across various stocks in various sectors. At the top of the list, of course, has been the tax base. about thirty percent in the year. We have also seen real strength in consumer discretionary stocks called. I grew up. Twenty seven percent and into the downside, energy stocks are down the better part of fifty percent.

on the year and then a broad basket of yours, financial is down around fifteen percent In a broader context, markets continue to outperform most global indices, as has been seen for many years now again, healthy urinate returns in Essen P, superb the NASDAQ other major international indices like the Euro stocks in Europe or the naked Japan are actually modestly negative on the year, and it is one last point: Jake, I'm the NASDAQ Nasdaq What about thirty, seven percent a year having rallied nearly seventy five percent of the laws of March and is on track for its best single year since that big bottom back in two thousand and nine, so any A solid your forehead returns depends where you look endless headline returned, certainly belie some of the real challenges that investors have faced along the way, so

as we were in the news this week near we released earnings in the global markets, division where you sit at a really strong performance up, almost thirty percent every year. I think it justifies a lot of people why a businesslike ares performed so well at a time when the economy is your dislocated, so help explain why, at a period like this yours Were busy even though the economy is really going through, some fits and starts sure and at risk over reduction, the Sorivellos this following three or four, results over the years. It's been extraordinarily volatile year in financial markets, and that has generated a sin. if you get him out of activity by money, managers of all kinds and all ass, a classes and all geographies. There's a tourism or business, which is what our clients are really busy, we're, really this and so He took a step back and look at the sequence of twenty twenty. That is the end

ass the world changing links. Edward pick, your metaphor, covered was anyhow and achieve with the world very very quickly, so because the outlook, change so enormously so fast quietly open to France, one they needed insight into what was going on, which to say views on markets and policy and the lecture the global economy and then too They need a restaurants were needed to shift their positions and we're looking for dealer. Liquidity were doing so so for all of the challenges of the economy and certain some of those I'm going challenges. I think that our people were able to cover clients their needs. Throw really extraordinary period ends up. I like We under stripes, as an adviser in hasn't a meteorite service struggle over five is

the one thing usually been very busy in your team has been very busy. There's bins, big trend towards automation across the board. That's not likely to stop, but humans really mattered in this crisis across a lot of different businesses in the trading space like how to industry, experts think about automatic trading strategies, passive management strategies and has covered costs low, but of a rethink around that that is a good question. If I think about our experience to the year solely from the perspective of a dealer or market maker, we essentially fight on two fronts. We have a very large electronic market, making complex much of it. As you know, Jake is provision through our Marquis platform and then alongside that is a global footprint which we worked very hard to hold onto of college hi touches salespeople and traders will make voice pockets and in moments where, like every other bank, we had a majority of our people-

operating out of their homes for period. I think there was a validation of the stability of our electronic market making systems but had said to your question, if I think about some of the largest risk that we were asked to provision and some of the deeply complexion nuance residual she's a client. Your help on that's when you're really thankful to have a set of senior experience. Sales one traders. I've been through volatile periods before again were there to make markets in a very I dont fashion, all right to the point, as always delighted to have you all today, thanks for joining us thanks Jack, that's For this week's markets update on exchanges of Goldman Sachs- and in case you, MR check out or other episode this week was Charlotte Keenan, of the office of corporate engagement on Small Business picture in the UK and how businesses there are pivoting in persevering through covered nineteen thanks for listening up airborne as great unsafe, weaken this podcast was recorded on Friday.

October 16th, two thousand and twenty thanks for listening all price references and market forecasts corresponds to the date of this recording. This podcast should not be copied distributed, published or reproduced in whole or in part. The information contained in this bar. Does not constitute research or recommendation from any Goldman Sachs Entity to the listener. Neither Goldman Sachs nor any of its affiliates, makes any representation or warranty as to the accuracy or completeness of the statements or any information contained in this podcast in any liability, therefore, including in respect of direct indirect or consequential loss or damage, is expressly disclaimed. The views expressed

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