With The S&P At Record Highs, Hedge Funds Are Again Dumping Stocks, Shorting Tech At A Furious Pace: Goldman Prime

Last week, ahead of the market's blow off top, hedge funds - which had been bearish for much of the late 2023 rally and sat on the sidelines in early 2024, finally tipped their toe in the market, and as we reported last week, citing the latest Goldman Prime data, aggressively bought the record high while ramping into Info Tech stocks - which were net bought for a 6th straight week - and saw the largest net buying in more than a year (as GS Prime explained "Semis & Semi Equip was by far the most notionally net bought subsector not only within Tech but across the entire US book this week.").

That didn't last long, however, and as Goldman's Weekly Equities Rundown report (a compilation that consolidates the latest positioning and flows intelligence, market themes, and actionable ideas from traders across the GS franchise, and includes observations from such trading desks as Share Sales Trading, Futures S&T, Derivatives, ETF trading, Prime Brokerage and various sector specialists) reveals, "US equities saw the largest net selling in 5 weeks, driven by Macro Products as well as Single Stocks." Meanwhile, after flooding into tech for the past month, the tide reversed, and net flows pointed to rotation out of Tech, HC, and Industrials, while all other sectors were net bought. In short, after a 6-week buying streak, hedge funds "unloaded Tech stocks at the fastest pace in 7+ months, as the sector was net sold for 4 straight sessions incl. Thurs post NVDA results."

In other words, while retail continue to bid up AI stocks at all time highs (frequently with deep OTM calls in hopes of extending what has been a staggering gammas squeeze), the smart money is betting that the next move is again lower.