Written by Carolina Mandel
NEW YORK (Reuters) – Global hedge funds continued to add bearish bets on stocks to their portfolios in the week to Aug. 1 as fresh data raised concerns that the U.S. economy is slowing faster than expected, Goldman Sachs said in a note to clients.
Goldman Sachs said this marked the third straight week that hedge funds’ bearish bets on stocks outpaced their long bets, noting that one long position was added for every 3.3 short bets.
The US dollar index fell into correction territory on Friday after economic data for two consecutive days pointed to a faster-than-expected slowdown. Fewer jobs were added than expected and manufacturing activity declined. The index closed down 2.43%.
Hedge funds cut their exposure to seven of 11 global sectors, including financials, industrials, real estate and energy. Healthcare stocks sold off at their fastest pace in nearly a year.
Hedge funds have been unwinding their risk bets for two weeks, and on Friday core long/short hedge funds had their worst day since June 2022, down 1.8% on average, Goldman Sachs said in a separate note.