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Hedge Funds "Were Calm" Yesterday: Shorted Macro But Bought-The-Dip In Tech Stocks

Tyler Durden's Photo
by Tyler Durden
Wednesday, Sep 14, 2022 - 04:44 PM

Excerpted from Goldman Sachs Prime Services note:

Amid all the chaos of yesterdays post-CPI collapse, Goldman's Prime Services group noted that "our sense is that hedge funds were relatively calm and shorting/hedging using Macro Products."

In other words, they saw little sign of long liquidations or risk unwinds.

Overall US book was net sold for a second straight day (1-Year Z score -0.8) , driven by short sales outpacing long buys 1.7 to 1.

Yesterday’s notional short sales in US equities was the largest in 3 months.

Macro Products (ETF and Index combined) saw the largest notional net selling since 8/19 (1-Year Z score -2.0), driven entirely by short sales.

On the other hand, Single Stocks were modestly net bought (1-Year Z score -0.8), driven by risk-on flows with long buys outpacing short sales 1.7 to 1. Info Tech, Health Care, Real Estate, and Staples were the most net bought sectors (all driven by long buys), while Energy, Materials, and Consumer Discretionary were the most net sold (all driven by short sales).

Hedge funds bought the dip in Tech stocks, which saw long buys outpacing short sales ~3.5 to 1.

Info Tech stocks have been net bought in 12 of the past 14 sessions – sector weighting vs. SPX now stands at -4.1% U/W (vs. the record low of -5.5% seen on 8/23).

For perspective, constituents across the TMT mega caps (GSTMTMEG), High Growth Software (GSCBSF8X), and Profitable Secular Growth Tech (GSCBOSQT) collectively were all net bought on the day driven by long buys.

ZH: Does this mean there is more pain to come?

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