Animal Spirits, Healthcare Innovation, and Product Stocks

Goldman Sachs' Rich Privorotsky argues that market dynamics are dominated by AI compute constraints and energy supply risks, while healthcare innovation remains a major underappreciated theme.

Key Takeaways

• 1.The global equity market remains captive to two dominant forces: AI and energy, overriding traditional late-cycle macro signals.
• 2.Healthcare innovation, specifically in drug discovery and cancer treatment, is significantly underappreciated compared to the hype surrounding AI.
• 3.Structural labor demand remains high (JOLTS at 7.77m) while labor mobility is frozen, suggesting a shift in the Fed's reaction function.

Table of Contents

• Oil
• Rates/Jobs
• Healthcare
• Side-note: Low and Rapidly Decreasing Product Stocks Are Likely to Keep Margins High in the Near-Term
• Additional Disclaimers

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