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Global funds bought up U.S. equities in the week up to Nov. 3,
in the largest five-day buying spree since December 2021,
according to Goldman's prime brokerage trading desk in a note
dated on Friday.
This left some caught in a squeeze, the bank said in a note on
November 2, when short positions became too expensive to hold as
stock prices rose.
Many got tangled up trying to flee crowded trades which became
losing positions, Goldman Sachs said in that note.
All three major U.S. stock market indexes soared into Friday
after a multi-session rally - five consecutive days for the S&P
500 and six for the Nasdaq - to nab their biggest one-week
percentage gains of 2023, so far.
Hedge fund long positions in information technology stocks
reached the largest in eight months, said Goldman Sachs.
A long position expects stockprices to rise, whereas a short bet
hopes they will fall.
Speculators favored tech for long positions, including software
companies. They were also bullish towards consumer discretionary
companies like restaurants and fashion with products and
services that people buy but don't need, said the note.
Health care and financial stocks were net sold, the note said.
The largest hedge fund buying centered on North America, while
Europe and Asia apart from Japan which were subject to the net
short positions, said Goldman Sachs.
October had seen fund managers dump $3 billion of China equities
sharply, according to a Morgan Stanley report citing data from
fund flow tracker EPFR.
(Reporting by Nell Mackenzie; editing by Dhara Ranasinghe and
David Evans)
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