Goldman's securities cohead says the Wall Street rally is 'fairly high quality' and shares how to trade through it

Core Viewpoint - The cohead of global banking and markets at Goldman Sachs, Ashok Varadhan, describes the current stock market bull run as "fairly high-quality" and emphasizes that US equities remain the best investment option [1][5]. Market Performance - The Dow Jones, S&P 500, and Nasdaq experienced significant lows in April following the announcement of tariffs by President Trump, but have since shown "very little volatility" [2][5]. - Varadhan indicates that the market's recovery can be viewed as a high-quality rally based on the stability observed since the lows [2][3]. Investment Strategy - Varadhan favors US equities due to anticipated future interest rate cuts, potential fiscal support from proposed legislation, the market's capacity to handle tariffs, and the ongoing rise of AI [3]. - He notes that while many investors share this optimistic outlook, a cautious approach among investors contributes to the market's upward movement [3]. AI and Market Positioning - Varadhan expresses confidence in the AI sector, stating it has gained momentum since early 2023 and suggests that investors should take advantage of the current market calm to increase "convexity" in their positions [4]. - He recommends purchasing index puts on equities and calls on the dollar, highlighting that these strategies can be executed "fairly cheaply" [4].