City strategists noticed net selling by long-term investment managers over the past week, with buying primarily focused on consumer and industrial goods, while purchases in the technology sector slowed.
On the other hand, hedge funds significantly increased their exposure to the technology sector over the past week after weeks of selling, followed by essential consumer goods. Meanwhile, hedge funds sold shares of healthcare, utilities, and real estate companies.
Citigroup pointed out that the recent performance of the sector aligns with the shift from inflation towards stagflation scenarios, where the technology sector excels. Over the past three months, significant changes have occurred. In April, the theme of “hyperinflation” dominated the market as global Purchasing Managers’ Indexes reached their lowest levels. They added, “Ultimately, the market will make its decision, and a clear pattern has emerged: exiting inflation and entering stagflation.”
