Karolina Mandl
NEW YORK (Reuters) – Global hedge funds continued to add bearish stock bets to portfolios in the week ended Aug. 1 as recent data raised concerns that the U.S. economy is slowing faster than expected, Goldman Sachs said in a note to clients.
This is the third straight week that hedge funds’ bets on falling stock prices have outpaced the number of long positions, Goldman said, adding that for every 3.3 miniature positions, there is one long position.
It entered correction territory on Friday after economic data for two consecutive days pointed to a faster-than-expected slowdown. Fewer jobs were added than expected and manufacturing activity fell. It closed down 2.43%.
Hedge funds reduced their exposure to seven of 11 global sectors. They included financials, industrials, real estate and energy. Healthcare stocks also traded at their fastest pace in about a year.
Hedge funds have been pulling back from risky bets for weeks, and on Friday, fundamental long/miniature hedge funds had their worst day since June 2022, with their performance falling an average of 1.8%, Goldman Sachs said in a separate note.
