HomeBusinessHedge funds turn bearish...

Hedge funds turn bearish again as yields spike

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., March 14, 2023. REUTERS/Brendan McDermid

NEW YORK, Aug 4 (Reuters) – Global hedge funds increased their bets that stocks will fall in a week when bonds yields rose after the United States’ credit rating was downgraded, a Goldman Sachs report on Friday showed.

Hedge funds added 4.6 short positions to each long position from July 7 to Aug. 3. “After three straight weeks of risk unwinds, the overall prime book was net sold on the week,” the report said.

Hedge funds were forced to partially unwind short bets in July to avoid further losses during a market rally triggered by better-than-expected corporate earnings.

The rally was interrupted this week after credit rating agency Fitch downgraded the U.S. ahead of an expected flood of Treasury supply in the third quarter. Higher yields can reduce the appeal of stocks.

Both the S&P 500 (.SPX) and Nasdaq Composite (.IXIC)
registered their biggest weekly declines since the week ended on March 10, with losses of 2.27% and 2.85%, respectively.

Goldman Sachs, as one of the biggest providers of lending and trading services through its prime brokerage unit, can track the movements of large hedge funds and asset managers.

The bank said its clients are placing bearish bets mainly through indexes and exchange-traded funds, not using particular stocks.

Equity long/short hedge funds have been vocal about the challenges of being bearish this year, as they were caught off-guard by a rally. Their performances have been hit by the losses with short positions.

Billionaire investor Daniel Loeb said in a letter on Thursday he had decided to trim his short bets to limit the vulnerability of his hedge fund, Third Point.

Investors were more bearish on North America and Asia, driven by Japan, and more bullish on Europe.

Reporting by Carolina Mandl in New York; Editing by Leslie Adler and Richard Chang

Our Standards: The Thomson Reuters Trust Principles.

Source link

Most Popular


Please enter your comment!
Please enter your name here

More from Author

Read Now

USC football vs. ASU updates, analysis, score from Pac-12 Conference Week 4 college game

The Arizona State Sun Devils host the USC Trojans in a Week 4 Pac-12 college football game on Saturday night at Mountain America Stadium in Tempe.Arizona State (1-2) is coming off a 29-0 loss against Fresno State.USC (3-0) was off last week after beating Stanford in Week...

Australia making most of ‘massive opportunity’ at NHL Global Series — Melbourne | NHL.com

You could see NHL gear all over the city Saturday, from Queen Victoria Market to the Central Business District to Melbourne Park, where fans participated in activities at the NHL Global Fan Tour outside Rod Laver Arena. It was an interesting mix of expats and Aussies. Kyle Webb...

Before We All Leave WhatsApp Because of the Channels Feature

From the COLlive inbox: "Educators and parents are very concerned about the new Channels feature on WhatsApp, turning it into another social media platform. Simply getting everyone to leave WhatsApp may not be the ultimate solution to the concerns we face." Full Story By Mendel Educators...

Jung Kook Hints ‘3D’ Is Coming, Brings Out Latto & Performs ‘Still With You’ Live for the First Time at Global Citizen 2023

Rob Kim/Getty Images for Global Citizen A lot happened in a too-short amount of time when Jung Kook made his Global Citizen Festival solo debut as co-headliner on a rainy day in New York City Saturday (Sept. 23). The ARMY was in full force supporting the BTS...

No magic pill for living till 100, but there are nine lessons we can learn: Dan Buettner – Times of India

Dan Buettner has spent years researching Blue Zones, the five places in the world where people live the longest, healthiest lives. With his documentary on the secrets of longevity creating quite a buzz, he spoke to Sunday Times about what centenarians can teach usHave you uncovered...

Stunning $6.75m mansion has BELL BOARD inspired by Downton Abbey

A Texan mansion on the outskirts of Dallas features unique touches such as a servant bell board reminiscent of the one seen in Downton AbbeyThe five bedroom home, which sits on six-acres of land was built in 2017, and is set to enter to market for...

Suella Braverman, UK interior minister, to raise ‘unsustainable’ migration pressures during U.S. visit

Home Secretary Suella Braverman walks on Downing Street on the day of a cabinet meeting, in London, Britain September 5, 2023 REUTERS/Peter Nicholls/File Photo Acquire Licensing RightsLONDON, Sept 24 (Reuters) - British interior minister Suella Braverman will raise the "the unsustainable pressures" created by illegal...

UK’s Braverman Seeks US Support for ‘Blueprint’ on Migration

UK Home Secretary Suella Braverman will travel to Washington on Monday to meet with the heads of the Department of Justice and Homeland Security as she seeks support for the British government’s hardline anti-migration push.Braverman will meet Secretary of Homeland Security Alejandro Mayorkas and Attorney General...

College football scores, updates: Deion Sanders, Colorado blown out by Oregon

Week 4 brings the most loaded college football slate in recent memory with six ranked-on-ranked matchups and that doesn't even include a Florida State-Clemson game that had everyone on the edge of their seats.In one of the marquee games of the day, No. 10 Oregon absolutely...

College football scores, games, updates: Deion Sanders, Colorado trailing early at Oregon

By now, you already know what's in store today. Week 4 brings the most loaded college football slate in recent memory with six ranked-on-ranked matchups and that doesn't even include a Florida State-Clemson game that had everyone on the edge of their seats early in the...