Hulk Hogan, wrestling icon, dies at 71 in Florida home
Investing.com – U.S. equity markets posted their highest-volume trading session on record, but liquidity continues to deteriorate. As such, Goldman Sachs partner John Flood sees increasing risks of persistent volatility.
In a client note sent on Tuesday, Flood pointed to an increasingly fragile backdrop, driven by thinning order books, foreign selling, and muted corporate buybacks.
Flood said 29.02 billion shares traded across U.S. exchanges on Friday, surpassing the previous record set just a day earlier.
However, liquidity, as measured by S&P 500 Futures top-of-book depth, has fallen below $2 million — effectively an all-time low.
“This is currently the widest gap between volumes and liquidity that I have ever seen in my career,” Flood wrote, warning that index-level volatility is likely to remain elevated and trading conditions difficult.
Flood noted a sharp uptick in short-selling activity in macro products, calling last Thursday and Friday the “largest two-day notional short selling in macro products in the history of our dataset.”
He expects more sharp but temporary squeezes in the near term, cautioning they should be viewed as selling opportunities unless there’s a clear policy shift from the Trump administration. One area of focus is the return of equity demand at lower levels, especially if the S&P 500 revisits levels below 5.000.
“The long-only community will start scaling buying the S&P 500 at 5,000 and will get significantly more aggressive in the mid-4000s,” Flood said, suggesting key support levels could begin to draw institutional capital despite the macro overhang.
Corporate buybacks remain subdued, with activity expected to pick up after companies exit blackout periods post-April 24.
Meanwhile, foreign investors — who own around 18% of U.S. equities — have been actively reducing exposure, particularly in the Mag 7, banks, and industrials, reflecting growing skepticism over U.S. market leadership.