'Let Them Eat Pi': Goldman Flows Gurus See Seasonals Soggy 'Til March 14th

Month-end tends to mark a recalibration in the market having worked through critical flows. In 2026 fashion, investors are already faced with uncertainty and volatility to kick-off March. 

As the S&P failed to rally through the critical 7k level "gamma wall", Goldman's flows gurus  - Gail Hafif, Brian Garrett, and Lee Coppersmith - say that investor sentiment and flows lead us to believe the only way up is down from here.

The market continues to field walls of worry despite a supportive macro backdrop which has made the path forward painful. We will watch for a change to the flows set-up, but the next couple weeks remain challenging for US equities. 

1. Geopolitical Ramifications 

While we leave the specifics to the experts, we look at the impact on oil spikes to S&P performance. The result? Mixed. Setting aside some of the more extreme episodes, the median returns beyond immediate term tend to be positive (we see similar behaviour in Brent).

 Since 2000, there have been 22 instances where WTI crude oil spiked by 10% or more in a single day.  Average Forward Returns:

• 1 Day: -0.24% (median: -0.01%)

• 1 Week: +0.52% (median: +1.30%)

• 2 Weeks: -0.35% (median: +1.75%)

• 1 Month: +1.23% (median: +3.57%)

Goldman's Dom Wilson and team see negative impact on equities and credit, but only a severe and sustained oil disruption would imply substantial consequences for global growth. We expect cyclical sectors and oil importers, which are vulnerable to positioning adjustments given a strong start to the year, will likely see pressure unless a resolution occurs quickly.

2. Prime Book... the buyer’s strike continues 

Global equities were net sold for a 2nd straight week (-0.6 SDs 1-year), as gross trading activity continued to increase driven by short sales outpacing long buys (2.1 to 1). The increase in gross exposure, coupled with the sustained dispersion under the hood, will continue to proliferate de-grossing episodes and further factor rotations which we've seen to start the year. 

YTD our PB team highlighted the semis buying versus software selling and private-credit fueled financials selling as the main sector themes in the US.

Source: Goldman Sachs

Source: Goldman Sachs

The predominance of these trades casts further rotations as the most obvious pain trade in the near-term. Elsewhere, EM was the most $ net bought region this week, driven by long buys. EM is now the second most $ net bought region YTD (behind DM Asia), while North America and Europe are both net sold YTD.

3. Fund flows = RoW fever 

Net flows into global equity funds were led by demand for global benchmarks and EM equity funds (+$38bn in the week ending 2/25 vs +$35bn in the previous week). 

In EM, flows into mainland China turned positive, while Korea continued to see the largest net inflows. US and global investors have embraced RoW mania diving into markets globally with the Korean Kospi as the ultimate darling.

Source: Goldman Sachs

4. Sentiment 

AAII investor sentiment has remained cautious as the S&P failed to maintain any meaningful rally and AI worries have not comfortably subsided. 

The more concerning court of opinion for the US equity market now is retail which in rather contained incidents has flexed its muscles and reminded the market just how formidable an impact significant outflows can have.

 

Source: Goldman Sachs

5. Seasonality 

March tends to be a soggier month for the S&P historically as the first half faces choppy price action downwards but ultimately sees an average return of 30 bps from March 1 to March 14th.

Let them eat Pi? the trajectory of the month reverses on March 14th as the next 2 weeks starting the 15th return 80 bps.

Source: Goldman Sachs

Overall, March notches the fourth worst monthly returns for the S&P since 1928 but is followed by a much more positive April.

Source: Goldman Sachs

6. RETAIL

i. Potential tailwinds for 2H March? Tax Refund $$$

On average, roughly 25% of annual tax refunds have been delivered in March, with roughly 75% of the total delivered by the end of April. This serves as an upcoming boost to consumer spending and sentiment to look forward to. Consumers will see a ramp up in tax refunds at the tail-end of March into April.

The trade: Our Portfolio Strategy team highlights Consumer Discretionary stocks have lagged both Industrials and Consumer Staples and trade at undemanding valuations. Our screen of middle income consumer stocks trades at a forward P/E of 16x, a 17% discount to the median S&P 500 stock that ranks in the 34th percentile since 2018.

Source: Goldman Sachs

ii. SPX Imbalances

Retail flows have tracked remarkably close to SPX returns over the past year, and while we have not seen major retail outflows, the unrelenting volatility so far in 2026 has done much to quell the retail fervor of 2025.

SPX Retail Imbalance vs Returns

 

Source: Goldman Sachs

SPX Retail Imbalance vs Spot

 

Source: Goldman Sachs

 

7. Sectors 

If you drop it on your foot and it hurts, investors have been looking for it and AI has been falling short. GIR recently noted that after years of asset-light outperformance, our sector-neutral basket of tangible asset-heavy stocks (ticker: GSTHHAIR) has outperformed our basket of asset-light stocks (GSTHLAIR) by 25 pp since the start of November.

Source: Goldman Sachs

However, we are now on #DefensivesWatch: While cyclicals have been in focus, March tends to be a seasonally strong month for defensives, and coming off a +7.23% February, we will be keeping an eye. 

 

Source: Goldman Sachs

8. Vol

Looking at Bloomberg's "HP" would present major gaps in a year that has been rife with intraday swings, dispersion, and factor rotations under the hood with sometimes imperceptible index moves.

In fact, the spread of SPX intraday vol to close-to-close realized vol has remained well above the 2y average and elevated since the start of the year.

Our systematic trading strategies (STS) have been popular this year as a way to play the dispersion under the hood:

• - Our favourite hedge: Downside Dispersion Strategy GSVIDUV9 which benefits from elevated SPX index skew and provides long vol exposure to the downside in single stocks 

• - COMING SOON: we will be rolling out GSVIDEV9  in the next couple weeks as a Nasdaq dispersion strategy (reach out for more details)

 

Source: Goldman Sachs

Looking beyond the S&P, and to illustrate RoW fever in the vol sphere, the EWY to SPX 1m vol ratio is in the 99th percentile on a 1 to 3y lookback. Similarly, the EEM to SPX 1m vol ratio is in the 98th percentile on a 1y lookback.

Source: Goldman Sachs

9. Buybacks 

Buybacks remain in full swing as last week finished 1.7x vs 2025 YTD ADTV and 1.5x vs 2024 YTD ADTV. Buybacks remain a tailwind for US equities into mid-March and taper off from there. While we don't think buybacks are in themselves enough to catalyze a push higher, the removal of these flows would exacerbate an already shaky tape.

We expect the next blackout window to start ~3/16 and is expected to run through end of April. In terms of authorizations, 2026 YTD authorizations are the 2nd most active standing at $317B, just behind 2023 YTD which was $318B. 

10. CTAs

The systematic community is finally an afterthought in the US equity market (for now) but will likely play a much more active role in the oil market as geopolitical tensions drive price swings.

Source: Goldman Sachs

As always, sustained trends in the equity markets will change systematic behaviour. CTAs have sold almost $13B in US equities to start the year, and our model currently shows them incrementally buying but that is subject to change quickly. 

Source: Goldman Sachs

Key levels to watch -- CTAs can sell up to almost $26B in a down BIG scenario:

• Short term: 6906

• Med term: 6752

• Long term: 6341

The desk has been active in risk-off hedges in both the equities and rates spaces --

Short-term tactical expression:   

• USD 31Mar26 .SPX<95% & 10ySOFR<ATMF CMS-0.15% @ 6.3%

Medium-term fundamental expression:   

• USD 18Jun26 .SPX<95% & 10ySOFR<ATMF CMS-0.15% @ 10%

Professional subscribers can read much more from Goldman's Sales & Trading team here at our new Marketdesk.ai portal