Institutional Research

Goldman Sachs reports the largest US-equity net buying in five weeks, led by short covering in macro products and long buying in single stocks. The desk sees continued support for AI and inference-related themes, but highlights a hawkish Fed backdrop, tactical derivatives activity, and sharply divergent sector flows.

• US equities recorded the largest net buying in five weeks, at +0.9 standard deviations versus the prior year.
• Technology and Communication Services were the most net-bought sectors for a third consecutive week, while Health Care was sold for a fifth straight week.
• The Fed raised rates 25 bp to 3.75%-4.00% and released a more hawkish rate path.
• Goldman Sachs launched more than 1,000 flagship single-stock hedge baskets designed to track company-specific peer and end-market exposures.

The report sees Generac's contractual hyperscaler order as validation of data-center backup-power demand and a positive read-through for Weichai, which supplies engines for major AIDC projects. It argues that gas engines, SOFC and the aftermarket opportunity are not yet reflected in estimates or valuation.

• Generac won a US$2.4bn Amazon backup-power order, with more than half non-cancelable or take-or-pay.
• Weichai targets 200–300 AIDC gas engines in 2026 and more than 2,000 units in 2027.
• JPMorgan views Weichai's FY27E valuation of about 13x P/E as the lowest among major global AIDC power-supply-chain players.
• The report says gas-engine and SOFC contributions are not in its estimates and are not reflected in current valuation.
• A-shares carry a Rmb52 target and H-shares a HK$55 target, both with Overweight ratings.

The report expects self-operated stores and e-commerce to cushion a sharp near-term franchise contraction, while channel quality and margins improve. Its CNY10.44 target price implies only 2.2% upside.

• Nomura forecasts 2026-28F revenue CAGR of 3.8% and net-profit CAGR of 9.8%.
• Franchise revenue is forecast to fall 52.4% in 2026F before broadly stabilizing in 2028F.
• Self-operated and e-commerce revenue are forecast to grow strongly in 2026F.
• A shift toward licensing-fee income is expected to lift franchise gross margin to 60.0% in 2026F.
• A 10x target P/E, below peer average, reflects uncertainty over recovery timing.

Nomura highlights ambitious targets for R&D intensity, first-in-class drugs, innovative-drug sales and global blockbusters. It expects innovative pharmaceutical companies and CRDMOs to benefit as detailed policies and stakeholder actions follow.

• Ten Chinese regulatory bodies released the 18-page 2026-30 sector plan on 18 September 2026.
• Listed pharmaceutical companies are targeted to average an R&D-to-sales ratio above 10%, versus about 8% currently by Nomura's estimate.
• First-in-class drugs are targeted to exceed 25% of global share, versus a current share likely in the teens.
• Innovative-drug sales growth is targeted above 20%, compared with 8% growth for the broad sector under the 14th Five-Year Plan.
• The plan seeks more than five drugs with global sales above USD1bn, versus two to three currently.
• Nomura identifies Innovent, Kelun Biotech, Wuxi Apptec and Wuxi XDC as likely beneficiaries.

The report argues that planned AI-related US investment-grade issuance should not materially crowd out EM credit demand. It pairs that view with constructive calls on KRW, Nigerian and Brazilian duration, while remaining selective across EM sovereign external debt.

• Hyperscaler issuance is projected at about $310bn in 2026, falling to $215bn in 2027 and $125bn in 2028.
• BofA says EM spreads remain near cycle tights despite multiple macro and geopolitical shocks.
• KRW appreciated 13.3% against the US dollar since late July, supported by exporter FX sales and improving portfolio flows.
• The report recommends long NIGB 31s and FX-hedged BNTNF January 2037 bonds.
• The BofA EXD Sentiment Tracker remains bullish but is no longer at an outright Buy threshold.

The report argues that markets still underprice a restrictive Fed and, in selected markets, further policy tightening. It combines this view with country-specific rate, curve and relative-value themes across the US, Europe, UK, Australia, Japan and Canada.

• BofA raises its year-end 2026 forecasts for US 2-year and 10-year Treasury yields to 5.0%.
• Its Taylor-rule and real-policy-rate frameworks imply a Fed terminal rate above 5%, versus market pricing near 4.6%.
• The report expects a more limited rise in long yields than in front-end rates, favoring US curve flattening.
• Australia remains a key hawkish theme, while Canada and the UK are viewed as pricing more tightening than BofA expects.
• The BoJ balance sheet is projected to shrink rapidly through end-2027, but BofA sees limited near-term risk of a sharp Japanese repo-rate spike.

The report argues that AI infrastructure, export-market expansion and rising shareholder returns can sustain Korean earnings growth well beyond the 2025-26 upturn. It favors technology, defense, power equipment, shipbuilding, autos, beauty, bio and financials, while recognizing sector-specific competitive and execution risks.

• Korea’s annual exports are expected to reach US$1.0tn in 2026, led by AI-related products and globally competitive non-tech exports.
• BofA expects global AI capex to exceed US$3tn in 2030 and memory TAM to approach US$2.0tn.
• Preferred sectors include memory, hardware technology, defense, shipbuilding, autos, electric power equipment, beauty, bio and financials.
• The report sees value-up policies, dividends and buybacks supporting shareholder returns alongside earnings growth.

The report retains an overweight China allocation and end-2026 MXCN and CSI-300 targets of 100 and 5,200. It favors the domestic AI ecosystem, energy security, robotics and selective shareholder-return opportunities while remaining selective in consumer and real estate.

• 2026 consensus EPS growth is projected at 14% for MXCN and 24% for CSI-300.
• AI remained a tier-one growth theme in 2Q26 and is expected to support the ecosystem through 2H26.
• JPMorgan sees liquidity as abundant but potentially turbulent rather than excessive.
• For Hong Kong, JPMorgan favors financials and real estate and underweights consumer discretionary.

The report contends that ticket issuance authority, rotating credentials, inventory control, payments, and installed gate infrastructure make Ticketmaster difficult for venues to replace. Open distribution may broaden storefront access, but Bernstein believes it would not materially weaken the entry-control moat unless third parties can issue credentials accepted by venue scanners.

• Ticketmaster's Host, Archtics, Ignite, SafeTix, payments, and scanner systems operate as an integrated venue operating system.
• The report identifies ticket-mint authority and gate-valid rotating credentials as the most durable control point in ticketing.
• High-demand onsales require queueing, inventory holds, payment controls, and fraud screening rather than simply more computing capacity.
• Bernstein believes a proposed open-distribution remedy would largely preserve Ticketmaster's minting and validation control.
• Switching providers requires data migration, settlement conversion, hardware recertification, staff retraining, and first-event execution risk.

Consumer sentiment remains unusually weak despite solid labor markets, spending, GDP growth and equity markets. Goldman Sachs finds that elevated price levels, political bias and especially declining institutional trust help explain the gap.

• Sentiment is below the level implied by US unemployment, headline inflation and the wealth-to-income ratio, and is also below model-implied levels across almost all developed markets.
• Higher post-pandemic price levels and political shifts following elections explain part of the weakness.
• Sentiment remains below 2019 levels across income, wealth, age, political-party, homeownership and social-media-use groups.
• Goldman Sachs finds that falling institutional trust explains a disproportionate share of the recent decline in net happiness, while perceived financial conditions explain less.