Goldman Sachs: Bloodbath in the markets – Hedge funds dump energy and bank stocks
Energy stocks were sold off at the fastest pace in four months.
Hedge funds carried out the largest stock sell-off in the past six months last week, including positions in the energy sector, according to a client note from Goldman Sachs.
In a separate report, JPMorgan highlighted a wave of selling in bank stocks.
Bank positions neutralized
According to JPMorgan’s prime brokerage note, speculative investors sold shares of banks and financial services companies globally, mainly in the United States, bringing their overall position in the sector to neutral.
This development coincided with broad-based liquidations across global equity markets late last week, as the sharp declines in First Brands and Tricolor reignited concerns over banks’ risk controls and credit market transparency, where complex loans and new financing instruments make it difficult to assess participants’ exposure.
Despite the sell-off, the S&P 500 ended the week 1.7% higher, as quarterly earnings from regional banks eased fears over the sector, while investors also found relief in recent comments from U.S. President Donald Trump regarding trade relations with China.
Shifting market balance
According to an August report from UBS, retail investors and mutual funds accounted for over 50% of trading volume in the U.S. stock market during the first quarter of 2025, while hedge funds represented less than 10%.
Goldman Sachs reported that hedge funds sold stocks in every major trading region except Europe, marking their heaviest selling activity in six months.
The bank noted that hedge funds unloaded losing long positions while increasing their short bets.
A long position anticipates that an asset’s value will rise, whereas a short position profits when its value falls.
Energy stocks under pressure
Goldman’s note added that energy stocks experienced their steepest sell-off in four months.
Crude oil prices fell below $60 per barrel last week following a report by the International Energy Agency (IEA), which continues to forecast a significant oversupply in the oil market.
Hedge fund selling focused on companies in the oil, natural gas, and fuels sectors, according to Goldman Sachs.
However, uncertainty over the true level of oil inventories and conflicting forecasts from other organizations, such as OPEC, have fueled doubts about the reliability of market estimates.
Historically low exposure to energy stocks
Goldman Sachs reported that hedge fund exposure to energy stocks tracked by its prime brokerage is at the lowest level in three years.
Overall portfolio manager returns declined by 0.73% between October 10 and 16, while systematic strategy funds recorded a 0.22% gain over the same period, according to the Goldman note.
www.bankingnews.gr
Οι απόψεις που εκφράζονται στα σχόλια των άρθρων δεν απηχούν κατ’ ανάγκη τις απόψεις της ιστοσελίδας μας, το οποίο ως εκ τούτου δεν φέρει καμία ευθύνη. Για τα άρθρα που αναδημοσιεύονται εδώ με πηγή, ουδεμία ευθύνη εκ του νόμου φέρουμε καθώς απηχούν αποκλειστικά τις απόψεις των συντακτών τους και δεν δεσμεύουν καθ’ οιονδήποτε τρόπο την ιστοσελίδα.
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