Hopes that the US Federal Reserve’s recent pause in interest rate rises might become a more permanent fixture, prompted hedge funds to buy US stocks at the fastest pace seen in two years last week, according to a report by Reuters.
The report cites a cline note from Goldman Sachs’ prime brokerage division as revealing that global traders “aggressively” acquired US equities in the week up to 3 November 3, in the largest five-day buying spree since December 2021.
The buying frenzy though, left some funds caught in a squeeze, according to the bank, as rising stock prices made short positions too expensive to hold.
All three major US stock market indexes registered big gains last week after a rally that spanned five consecutive days for the S&P 500 and six for the Nasdaq.
According to Goldman, hedge fund long positions in information technology stocks also reached the largest seen in eight months, with investors favouring software companies, as well as companies in the consumer discretionary sector, including restaurants and fashion firms.
Goldman’s data reveals that the largest hedge fund buying centred on North America, while Europe and Asia, apart from Japan, were subject to net short positions.estest
