"Smart Money" Accelerates Shift: Hedge Funds Dump Tech Stocks, Pour into Energy and Materials at Fastest Pace in Five Months

Recent data from Goldman Sachs reveals that Wall Street's "smart money" is accelerating its shift away from technology stocks and reorienting towards new sectors. Last week, hedge funds poured into energy and materials stocks at the fastest pace in five months.

Goldman Sachs' Prime Brokerage records indicate that during the first week of July, i.e., last week, global stock markets witnessed modest buying for the first time in three weeks, with long positions outpacing short selling. Both macro products (ETFs) and individual stocks saw net buying, driven by short covering and long buying respectively. Regionally, most major markets, led by Europe and Asia, recorded net buying. Sector-wise, industrials, financials, and energy topped the list of global net buyers, while communication services, information technology (IT), and utilities saw the largest net selling.

The Goldman Sachs Prime Brokerage report highlights that following a generally subdued and bearish fund flow environment, hedge funds net bought commodities-sensitive stocks last week. Specifically, energy and materials stocks emerged as the top net buyers on Goldman Sachs' US Prime records for the week. These commodity-sensitive sectors recorded net buying for the third consecutive week, achieving the largest net buying volume in five months, fueled almost entirely by long buying.