Hedge Funds Pile On Shorts, Sell Stocks For 5th Consecutive Week Despite Furious Rally

Stocks closed just shy of all time highs, the S&P500 surging 4% last week - its best week of the year - after tumbling in the first week of September - its biggest drop since March 2023 - but one wouldn't know there was such a powerful reversal in sentiment by looking at the ongoing liquidation among the smart money crowd: according to Goldman's Prime Brokerage, overall US equities were net sold for a 5th straight week, driven by short sales outpacing long buys.

Gross trading activity – long and short combined – rose for a 6th straight week and saw the largest increase since Mar ’23 (98th percentile 5-year), led by Single Stocks; suggesting HFs have been actively deploying capital amid the September conference season and a busy macro calendar.