Hedge funds continue to bet on big US tech stocks

Goldman Sachs analysts said in a recent note that hedge funds sold tech stocks last week for the third straight week.

Goldman Sachs analysts said in a recent note that global hedge funds continued to sell out of technology stocks for the third week in a row, making technology stocks the most oversold sector. Some funds have also initiated short positions in tech stocks, highlighting a notable shift in sentiment.

Hedge funds sell tech stocks at their highest level in 11 weeks

Goldman Sachs said in a note that global hedge funds sold tech stocks for the third consecutive week last week, as asset managers reduced their exposure to big tech stocks in response to recent index declines.

The bank said tech stocks were the most oversold sector in the week ending Jan. 6, with hedge funds selling these stocks at the strongest pace in the past 11 weeks.

Additionally, in addition to unwinding long positions, the fund sold these stocks short, betting that their prices would fall. Goldman said a variety of technology stocks were sold, including telecom equipment makers, software providers, chip makers, and high-tech hardware and storage companies.

The bank also said the hedge fund also sold consumer discretionary companies that make products that shoppers want to buy but aren’t essential. This sector is already underfunded, and the performance he rose 3.5%.

Speculators were unloading stock positions at the fastest pace since September 2023, it said, adding that traders were shorted at hotels, restaurants, automakers and retailers around the world.

Goldman’s prime brokerage division, which services hedge funds, saw investor performance decline 1.07% from Dec. 29 to Jan. 4.

Big Tech causes market losses

Signs of an economic slowdown appeared in December, but the first week of 2024 was particularly difficult.

The S&P 500 has fallen about 1.8% over the past five sessions, to its lowest level in about a month. Just weeks after hitting an all-time high last month, the technology-heavy stock has fallen more than 3.5% in the same period.

Just as big tech companies led the market’s rally last year, current losses are again being driven by these stocks, accounting for more than 70% of the S&P 500’s gains in 2023. . In particular, Apple (NASDAQ:) continues to rise significantly. It has faced a decline of more than 3.1% since the beginning of the year following a downgrade by analysts at Barclays.

Neither author Tim Freese nor this website, The Tokenist, provides financial advice. Please review our website policies before making any financial decisions.


This article was originally published on The Tokenist. Check out Five Minute Finance, The Tokenist’s free newsletter, which provides weekly analysis of the biggest trends in finance and technology.

Source link

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button