Secrets from Goldman Sachs' trading room
First post
Pressure is easing, but the market has not yet recovered:
Latest figures from Goldman Sachs' analysis desk reveal something interesting:
Markets are stabilizing, but are still far from 'healthy'.
What is the liquidity situation? The key metric Goldman focuses on is 'maximum accounting liquidity' in the S&P 500 index!
That is: how much money can be moved quickly without causing a price shock (or in simple terms: how easy it is to transfer risk in the market).
Currently, this figure stands at just $4.4 million,
a significant improvement from the historical low of just $1.1 million recorded at the beginning of the month,
but still well below the average of $8 million since the start of the year,
and far from the two-year average of $13.27 million.
What does this mean in practice?
It means it's still difficult to 'move' in the market without moving it.
Large traders and investors trying to inject significant amounts of money, encounter resistance.
Therefore, any significant fluctuation appears sharper than it should.
It's like trying to drive a car with heavy steering, possible, but not smooth.
ETFs continue to dominate the stage
ETFs (exchange-traded funds that trade like stocks) currently account for 35% of trading volume, compared to an average of 28% since the start of the year.
True, this is still lower than the 43% peak recorded earlier this year.
But this figure indicates a return to a more stable and calm range in terms of market dynamics.
So what do we learn from all this?
The market shows signs of stabilization, but still operates under noticeable liquidity constraints. There is more movement, less fear, but it's not yet 'free'.
Or as Goldman elegantly summarized it:
'It's not a walk in the park, but it's not a minefield either.'