Goldman Sachs said in a note to its clients that global hedge funds continued to add bets on declining stocks to their portfolios in the week ending August 1st, as new data raised concerns about the U.S. economy slowing down at a faster pace than expected.
Goldman Sachs stated that this marks the third consecutive week in which hedge funds’ bets on declining stocks have outpaced the addition of long positions.
The Nasdaq Composite Index fell into correction territory on Friday after two consecutive days of economic data pointed to a faster-than-expected slowdown. Fewer jobs were added than anticipated, and manufacturing activity declined. The index closed down by 2.43%.
Hedge funds reduced their investments in seven out of 11 global sectors. These sectors included financials, industrials, real estate, and energy. Healthcare stocks were also sold off at the fastest pace in nearly a year.
