Complete Hedge Fund Positioning, Performance And Flows Update: Week Of Sept 8

To summarize market sentiment as we enter a very busy week for markets with what may be a jumbo rate cut to follow in just days, here is Pierre Saboureault with the 30,000 foot view: "Goldman's Conference season in full swing with some reassuring commentary from retailers, issuance back to school on a strong footing, increased anticipation of Fed rate cuts on this side of 2025 and some pressure taken off Rates… but AI weakness, stagnant manufacturing business sentiment and a resolutely softer employment report, resulted in a week which saw the S&P500 mark new all-time highs on Thursday, before stabilizing lower on Friday and advancing a modest +33bps over the shortened week."

What does this mean for the smart money? As the Goldman trader elaborates, "the sentiment indicators we follow fall in line with this push-pull, all now aligned in ‘neutral’ territory. Flow-wise, Institutions are still reluctant to chase all-time highs, Hedge Funds continue to reduce their Gross and Net leverage. The ‘non-economic’ cohort offered more support, with CTAs arguably close to max length but not selling US indices just yet, Corporates enjoying the last days of their buyback open window humming at a moderate pace, and inflows into Equity Mutual Funds flashing back-to-back solid weeks at +$18bn after +$17bn. Bottom-line, Fundamental players appear to be waiting for a dip, while supply from Non-Fundamental players would require a somewhat material move lower to manifest. So, bar a shock, sideways markets would seem like the narrow base case path from here."