Caution is growing on Wall Street as hedge funds reduce their positions at the fastest pace since April. What are the reasons?
Despite the rebound in us stock indices, hedge funds took advantage of the last week to reduce positions at a rate not seen since the beginning of April, according to the weekly report of Prime Brokerage of Goldman Sachs.
The bank noted that sales were concentrated in short operations about macro products and individual actionsreflecting greater caution among institutional investors. In parallel, short positions in US ETFs recorded their largest percentage increase in more than five monthsending a streak of seven consecutive weeks of net purchases in actions.
Even with this dynamic, the stock market closed with profits: the S&P 500 went up 1.7% in the week, supported by the good results of some technology companies and the expectations of an eventual rate cut before the end of the year.
Energy and finance, the hardest hit sectors
The energy sector was the best-seller globally, in all regions, after WTI crude oil fell below US$60 per barrel for the first time since May. Meanwhile, the US financial sector ended with moderate net sales: managers had started buying bank shares at the beginning of the week, but reversed the trend between Wednesday and Thursday due to growing fears about credit quality.
From a flow perspective, both asset managers like the hedge funds They closed the week like net sellerswith estimated outputs in US$1.7 billion yu$s2 billionrespectively.
Among the segments with the best performance, the Renewable Energies, Unprofitable Technology and stocks with high short positions. On the contrary, the sectors of Anti-Obesity Medications, Defense and Liquid Regional Banks they were left behind.
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Expectation for results and inflation data
Operators are now focusing attention on a key corporate results weekin which the 18% of the capitalization of the S&P 500 will present balance sheets. Furthermore, it is expected September CPI datawhich will finally be published on Friday.
The Federal Reserve entered its period of silence prior to the meeting of the October 29where the market anticipates definitions on monetary policy. He implied movement of the S&P 500 until October 24 it is estimated at 2.31%reflecting an expectation of moderate but increasing volatility.
Source: Ambito
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