Global hedge funds have upped their bets against US banks and other financial companies to the highest level seen in four months, according to a report by Reuters citing a client note from Goldman Sachs’s prime brokerage unit.
According to the note, which has been seen by Reuters, hedge funds exited long positions and added short bets that stock prices would fall in banks, insurance companies and financial intermediaries ahead of the release of bank earnings on Friday.
The note sent to Goldman Sachs’s hedge fund clients tracked trading activity from Friday, 5 January to Thursday, 11 January.
US banks shares fell on Friday after major lenders including JPMorgan Chase and Bank of America posted a drop in Q4 profits. Wells Fargo, meanwhile, posted an increase in Q4 profits, despite warning that its net interest income could fall 7% to 9% this year, in turn sending shares down more than 3%.
The S&P 500 banks index closed over 1% down after earlier hitting its lowest level since 14 December.
