Tony Pasquariello does not sell certainty. Goldman Sachs’ head of hedge-fund coverage opened his latest note by saying he has not had a strong directional bias of late. Then he picked a path anyway. Tricky September and October. Stronger November and December. And, with a bit more conviction than before, a balance of risk that still favors the bulls.
The punchline is larger than the S&P. He expects U.S. equities, interest rates and commodity prices higher by year-end. That is one map, not three. The investor opportunity sits on that map. Own the secular stock trend. Keep a trading long in commodities. Respect the back end of the bond market. Do not treat a messy six weeks as a verdict on the year.
What the market already absorbed
A lot has been thrown at U.S. stocks over the past few months. The index rolled with the punches. Pasquariello notes the S&P 500 is less than 2% from taking out the highs. That is not a crash tape. It is a tape that has already paid people who faded every headline.
Kevin Warsh and last week’s FOMC, in his reading, did what they needed to do. The back end of the curve settled. Inflation breakevens tightened. Equity volatility compressed. Long-duration stocks outperformed. Hopes of a one-and-done tightening cycle died. Financial conditions still got easier. That mix is why he says the setup is better than it was a month ago. The bond market did a lot of the work first. Stocks noticed.
He does not tell clients to fight the Fed. Housing and the low-end consumer still feel a tightening cycle. He takes that seriously. He also takes the house view on the path. Dom Wilson’s line, which Pasquariello quotes, is the skew. Four hikes may be priced. Two is more likely than six. The premium sits against a proper long cycle. The risk, in that house view, is that the Fed under-delivers.
The crowd is wary. The index is not
The S&P is tracking a fourth straight year of double-digit returns. Breadth has improved. The SOX semiconductor index is up about 68% in the run he flags. Popular parts of the market have worked. Off-the-shelf sentiment has not. AAII bulls versus bears, CNN’s fear-and-greed gauge, and Goldman’s own sentiment indicator all sit downbeat. That sentiment print was near minus 0.9, the worst in more than a year.
Levered money is positioned like it believes the discomfort. Pasquariello puts full prime-broker net exposure in the 34th percentile of the past year. That is not a blow-off long. That is a book that has already taken chips off the table. Price, he reminds the trading community, drives sentiment. A wary book plus an index near highs is how squeezes start. It is also how people miss a year-end grind because the feel was wrong in late September.
The yards under the hood have been hard. He says that out loud. The last three months were not easy. The point is not that pain was fake. The point is that pain inside a still-up secular trend is a positioning fact. It is not automatically a trend change.
The inconvenient truths he will not skip
Energy prices are rising again as inventories fall. Time is the enemy of that deficit. Higher energy has helped melt global bond yields higher. Stocks have come off the start-of-year highs from six months back. Iran remains an open headwind with tail risk. About 70% of U.S. GDP is consumption. The fiscal impulse faded after tax-return season. Higher commodities and higher interest rates compound on the same household.
His plain English is the line that should sit on a kitchen table. If a tank of gas is $4.50 and a 30-year mortgage is 7%, households get furious. Furious households vote and cut spending. That is the political and the economic risk in one sentence. It is why he will not pretend the next two months are a glide path. It is also why commodities stay in the portfolio instead of in the “maybe later” drawer.
The barbell is the opportunity
Pasquariello’s construction is the usable part of the note. Core length in equities. Trading length in commodities, because the indices are still doing their job. Options on higher rates, even with a flatter curve, because he worries most about the back end.
That barbell is the investor opportunity. A pure equity long owns the fourth year of double-digit index gains and the wary hedge-fund book. It also owns $4.50 gasoline and a 7% mortgage. A pure commodity long owns the inventory deficit and the Iran tail. It also owns the chance that a year-end risk-on tape steals the bid. Holding both is how you stop needing the next headline to be only one thing.
Gold near $4,350 already lives in that commodity sleeve. So does copper after funds sold the mid-September lows. So does crude if stocks keep falling. Pasquariello is not picking a single metal. He is saying the commodity complex can finish the year higher alongside stocks and yields. For readers who live in mining shares, that sentence is the permission structure. Producers can work in a world where the S&P grinds up and the metal tape stays bid. They do not need a crash to be relevant. They need the barbell to be real.
Canadian mining stocks and other resource names sit on the commodity side of that marriage. Size them as a trading long, not as a substitute for the equity core, if you are following his sketch. A tricky September and October is when those names get cheaper. A stronger November and December is when the sketch says they should work with the index, not against it.
Election fog and a Lehman anniversary
He expects the path through the election to stay tricky. He still expects the S&P higher at year-end than it is today. Bigger picture, the primary trend in U.S. equities remains higher. He says the same of interest rates and commodities. Three higher prints. One portfolio problem if you only own one of them.
This week marked 18 years since Lehman Brothers failed. Pasquariello went back to his old notes. The bit that stuck was a week of generational extremes in liquid assets: a 1,000-point range in the Dow, a 100-basis-point swing in two-year yields, a $100 move in gold. Funding markets looked as if they might stop. By week’s end many assets had barely moved. The S&P finished higher. Tails, he wrote then, are often fatter than the last crisis taught you. The reminder is not “hide in cash.” The reminder is that a violent week can leave the trend intact and the wary book still wary.
How to use the note without worshipping it
Write the calendar first. Respect September and October as a chop zone. Do not give away a year-end long because the chop arrived on schedule. Keep commodities as the second engine, not as a panic button. Watch the back end of the Treasury curve the way he does. A melt higher in long rates is the risk that hits both houses and the multiple on stocks.
Watch households too. Gas and mortgages are the political price of his commodity-plus-yields call. If that pair stays hot, the equity core will feel it even if hedge funds stay light. If energy inventories rebuild and yields settle, the barbell still works. It just works quieter.
None of this is a promise that November opens in a straight line. Pasquariello said the footing is tricky. Believe that part. The opportunity is believing the other part at the same time. Stocks, yields and commodities can finish 2026 higher than they sit today. The book that is only long the index, or only long metal, is betting he is half right. The barbell is betting he is mostly right and that the next six weeks are the fee.
Disclaimer
Market commentary as of Sept. 21, 2026, based on a Goldman Sachs note from Tony Pasquariello as summarized by Zero Hedge. Views belong to that note, not to a forecast guarantee. This is not investment advice and not a recommendation to buy or sell equities, Treasuries, gold, oil, copper, or any mining stock. Sentiment and positioning reverse. Do your own work. Past performance is not a guide to future results.