During the 'Black Monday' and 'roller coaster' of the US stock market last week, smart money took the opportunity to buy on dips. In terms of product structure, the operating income of 10-30 billion yuan products was 401/1288/60 million yuan respectively.

On August 12th local time, financial and financial blog Zerohedge noticed that the market sentiment of hedge funds is changing. When retail investors and CTAs panicked and sold stocks last week, smart money was heavily bottoming out and re-entering US technology and quality stocks.

After being net sold for 8 continuous weeks, the US stock market showed a small net purchase trend last week, which was not offset by a large number of short sales. Among the 11 industry sectors of the US stock market, 9 sectors were net purchased. Among them, technology and information technology, essential consumer goods, industry, communication services and financial sectors are leading in net purchases, while non-essential consumer goods and real estate sectors are net sold out.

During the recent market correction, hedge funds bought high-quality stocks. The constituent stocks of the US high-quality long-term stock basket (GSXUMFQL) have shown net purchases in the past three weeks, and the nominal net purchase volume last week is the largest since March 2023, mainly driven by long-term funds buying and short covering executive program buyout, with a buy ratio of approximately 2.5 to 1.

In terms of risk exposure, the proportion of US stock longs is rising. Data shows that the total lever ratio of US basic longs/shorts increased by 0.9 percentage points to 190.4%, the net lever ratio of US basic longs/shorts increased by 1.1 percentage points to 52.6%, and the ratio of US basic longs/shorts increased by 1.0% to 1.763.

Funds attack high-quality stocks, Goldman Sachs: Buying low after the S&P 500 fell 5% has significant returns.

Last week (August 5th to August 9th), the US stock market staged a "roller coaster" market, the most volatile week of the year. $S&P 500 Index (.SPX.US)$On "Black Monday", it fell nearly 4%, the largest drop since September 1998. However, with factors such as employment data easing recession concerns, the US stock market has basically recovered from the week's decline as of last Friday. Specifically, the S&P 500, Dow Jones Industrial Average, and Nasdaq respectively fell slightly by 0.04%, 0.6%, and 0.18% this week.

Goldman Sachs trader Matthew Kaplan analyzed that the recent market price trend mainly reflects the rotation of funds in global stock markets, especially macro products and cyclical assets, such as semiconductors, funded by asset managers and quantitative traders. The market's risk aversion is obvious, and a large amount of money flows into money market funds. The assets under management of these funds hit a record high of $6.19 trillion, indicating that a large amount of cash is still waiting outside the market to re-enter.

However, as market volatility subsides, funds are gradually shifting to defensive sectors such as healthcare and information technology, and returning to high-quality stocks and earnings stocks that have been sold off in the latter part of last week. In the end, the buy and sell preferences of asset managers (LOs) were basically balanced, while hedge funds (HFs) net bought about $1.5 billion.

Matthew Kaplan said that last week was one of the busiest weeks in the summer for the past five years, and the US market experienced a big wave of about 4.4% after the sell-off on Monday. Although there were many unfavorable factors at the beginning of last week, such as the rapid closing of the yen arbitrage trade, the S&P 500 index eventually closed for the week.

After a big rise and fall in a week, Goldman Sachs also re-examined AI stocks. Goldman Sachs pointed out that even if the market is tired of concept stocks of AI, high-quality AI stocks are still attractive, with strong technical foundations, market positions or growth potential in the AI ​​field.

'Buy low after a 5% drop' usually turns out profitable over the past 40 years in the S&P 500 index. The team led by David Kostin said that since 1980, if investors buy the index at a price 5% lower than the recent high point, the next three months will achieve a median return of 6%.

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