"Make Mag 7 like U.S. Treasuries"! Goldman Sachs: U.S. stock mining stocks soar amid earnings volatility, while tech giants are "more stable"
Goldman Sachs hedge fund head Tony Pasquariello stated that the earnings volatility of metal and mining stocks far exceeds that of the Magnificent Seven tech giants, making their performance appear comparable to U.S. Treasuries. Prices of metals such as rare earths and gold have reached historic highs, with the Roundhill Magnificent Seven ETF rising 17%. In contrast, the SPDR S&P Metals and Mining ETF has increased nearly 88% during the same period. Pasquariello believes that the current market environment is highly dynamic, showcasing different trends
According to Tony Pasquariello, head of hedge fund business at Goldman Sachs, the performance of metal and mining stocks makes the seven major tech giants of the U.S. stock market look like U.S. Treasury bonds. Stocks linked to metals such as gold, copper, and rare earths have much greater earnings volatility than those "more stable" and historically well-performing stocks of the seven tech giants.
Since U.S. Treasury bonds are known for their low volatility, Pasquariello believes that the stocks of the seven tech giants may be more suitable as safe-haven assets to hedge against the severe volatility and speculative characteristics of the metal and mining industries over the past few years.
Rare earths have always been a focal point in the U.S.-China trade disputes. Gold, as a safe-haven asset, has frequently set historical highs this year, with gold prices this week surpassing $4,300 per ounce for the first time, while silver has also reached a historical high, currently trading at $54 per ounce.
The Roundhill Magnificent Seven ETF (MAGS.US) has risen 17% year-to-date, and Nvidia (NVDA.US) has reached a market capitalization of $4.3 trillion. Other stocks, after performing poorly at the beginning of the year, have begun to rebound with the rise of the artificial intelligence craze. In contrast, the SPDR S&P Metals and Mining ETF has risen nearly 88% during the same period.
Pasquariello stated, "This is still one of the most vibrant market environments I have ever seen—over the past few weeks, the market has shown both positive and negative tail trends."
