Goldman Sachs Group, Inc. reported that hedge funds accelerated their selling of U.S. equities last week to the quickest pace since early April, even as major indexes finished higher with the S&P 500 up 1.7%.
According to the bank’s Prime Brokerage data, the bulk of the selling came from short positions in Macro Products and Single Stocks. U.S. ETF shorts rose at the fastest rate in more than five months, bringing an end to a seven-week net buying streak in individual names.
Energy was the most heavily sold sector globally, as West Texas Intermediate crude dipped below $60 a barrel for the first time since May. U.S. Financials ended the week slightly net sold after managers shifted from buying earlier in the week to selling midweek, reflecting growing concerns over credit quality.
Asset Managers and Hedge Funds both closed the week as net sellers, posting outflows of $1.7 billion and $2.0 billion respectively. Themes like Renewables, Non-Profitable Tech, and Most Short names outperformed, while Obesity Drugs, Defense, and Liquid Regional Banks lagged.
Investors are now bracing for a packed earnings calendar, with companies representing 18% of S&P 500 market cap set to report this week. The release of the delayed September CPI report on Friday will also be closely watched. Meanwhile, the Federal Reserve System has entered its blackout period ahead of its October 29 policy decision, with the S&P’s implied move through October 24 currently sitting at 2.31%.