Wall Street Today: Goldman sees hard times for stock pickers as favorites lag

Economically sensitive stocks and banks led major U.S. indexes to another set of fresh records. Shares of banks climbed even higher as bond yields rose ahead of the annual Jackson Hole gathering of central bankers. Yields rise as prices fall, usually making lending activities more profitable for financial firms.

That all helped send the $S&P 500 Index (.SPX.US)$ up 0.2%, to 4496.19, notching a fifth straight day of gains and its 51st record of the year. The $Dow Jones Industrial Average (.DJI.US)$ added or 0.1%, to 35405.50, up four straight days, while the $Nasdaq Composite Index (.IXIC.US)$ rose 0.1%, to 15041.86, also hitting a record.

Retail traders pile into China stocks in dip-buying mode
A bout of frenzied buying from dip-hunting retail traders over the last couple of days has helped spur a rally in Chinese stocks listed in the U.S. after a prolonged selloff.

Net purchases of Chinese technology shares in New York by retail investors in the past five trading sessions topped the $400 million mark, according to Vanda Research. The bargain-hunting helped push The Nasdaq Golden Dragon China Index up more than 13% in the past four days, for its best run since late June.

Salesforce's quarterly sales jump on corporate spending
$Salesforce (CRM.US)$, the top maker of cloud-based customer-relations software, posted a strong gain in quarterly sales and boosted its forecast for annual revenue, a sign businesses have accelerated spending and are buying a broader array of products added through acquisitions.

Hedge funds could be staging a comeback as short bets post best month since 2010
Short selling is booming again after almost being left for dead due to the $GameStop (GME.US)$ mania. Hedge funds' short book generated in July the best alpha since 2010, and now it's outperforming the long side of their strategies, according to Morgan Stanley prime brokerage data.

The outperformance in the bearish bets is good news for hedge funds that are starting to come into favor again after a decade of mediocre performance pushed cost-conscious investors away. After three straight years of outflows, hedge funds saw more than $6 billion client inflows in the first quarter, according to HFR data.

Google, Microsoft plan to spend billions on cybersecurity after meeting with Biden
The White House hosted a cybersecurity summit Wednesday with CEOs in sectors ranging from tech to insurance. The meeting follows a wave of cyberattacks that have brought added urgency to security issues.

Big Tech companies including $Alphabet-A (GOOGL.US)$ and $Microsoft (MSFT.US)$ committed to spending billions on cybersecurity following the meeting.

Goldman sees hard times for stock pickers again as favorites lag
With defensive wagers like Big Tech reclaiming the equity leaderboard and undervalued companies harder to find, stock pickers are finding life tougher after notching big gains in the early-2021 market rebound.

One-third of large-cap mutual funds are beating their benchmarks this quarter, compared with 57% in the first three months of 2021, Goldman Sachs data show. Their recent struggles have sent the six-month return on a Goldman Sachs basket of equities beloved by hedge funds to 13 percentage points below the S&P 500, being the worst run since 2008.

The world economy's supply chain problem keeps getting worse
A supply chain crunch that was meant to be temporary now looks like it will last well into next year as the surging delta variant upends factory production in Asia and disrupts shipping, posing more shocks to the world economy.

J&J says Covid booster shot produced strong antibody response
$Johnson & Johnson (JNJ.US)$ said a second shot elicited a nine-fold increase in antibodies against Covid compared with levels seen 28 days after a single dose of the jab.

Mathai Mammen, global head of Janssen Research & Development at Johnson & Johnson, said the company looked forward to "discussing with public health officials a potential strategy for our Johnson & Johnson Covid-19 vaccine, boosting eight months or longer after the primary single-dose vaccination".

Source: Bloomberg, Dow Jones, CNBC, Financial Times