Hedge funds were net sellers this week, reducing their exposure primarily in Industrials, Technology, and Energy sectors, while increasing their positions in Health Care and Consumer Discretionary, according to Investing.com, citing a report by Citi.
Long-only managers also pared back their exposure, with the most significant outflows seen in Real Estate and Energy, while boosting their holdings in Financials and Consumer Discretionary.
This week’s top-performing sectors were Technology, Consumer Discretionary, and Financials, while Energy, Health Care, and Real Estate lagged.
Market indicators show that the “Growth Shock” regime remains the most closely correlated, followed by the “Goldilocks” environment. Recent 22-day relative returns align with patterns typical of the five most common regime clusters, which account for around 80% of market observations. Sector performance over the past 22 days has mirrored trends consistent with the “Growth Shock” scenario.
The “Goldilocks” correlation has also strengthened, nearing its highest level. Recent market activity has seen Consumer Discretionary outperform while Energy underperformed significantly, contributing to the dominant “Growth Shock” correlation. The “Goldilocks” regime, typically favourable for Technology, has maintained a strong correlation as the sector continues to lead the market.
