Global hedge funds bought more stocks than they sold for the second consecutive week last week, mainly in ‘cyclical’ sectors such as energy, industrials and materials, amid an “almost no panic” market, according to a report by Reuters.
The report cites data from Goldman Sachs as revealing that hedge funds were net buyers in 10 out of 11 US sectors, mostly betting that shares in cyclicals would rise amid a stock rally. Goldman Sachs’s report also found that cyclicals attracted the most net buying last week — the most since September 2021.
Last week, both the S&P 500 and the Nasdaq were up by 1.37% and 2.31% respectively, while a mega-cap rally pushed the former above 5,000 for the first time.
The report added that there was optimism to be found, particularly in bullish options for big tech names, stating: “The equity options market is pricing almost no panic, and with growth remaining more resilient than expected, the risk of re-acceleration and a momentum unwind is increasing.”
