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高盛:特朗普“超级周”结束,美股将进入轮动行情

Goldman Sachs: Trump's 'Super Week' ends, the US stock market will enter a rotation market.

wallstreetcn ·  Nov 12 01:06

Goldman Sachs traders expect that after the trading market driven by the US election ends, the forecast rotation pressure will continue to be a significant feature of the market, as investors put money into smaller market cap companies and seek opportunities in cyclical/inflation themes.

The results of the US presidential election were announced last week, originally widely expected to be a closely contested battle, but it ended with a major victory for former President Trump and the Republican Party. At the same time, the data shows that the stock market's performance also exceeded expectations,Russell Indexup 8.6%, NASDAQ up 5.4%, S&P up 4.6%.

After this shocking buying frenzy, Goldman Sachs trader Mike Washington stated that with the elections, rate cuts of 25 basis points by the Fed and Bank of England, yield curve fluctuations (10-year US Treasury bond yield decreased by 7 basis points to 4.30% within a week), the return of earnings report season, investor fatigue has started to show.

However, despite this, Washington remains optimistic, forecasting that rotation pressure will continue to be a significant feature of the market as investors allocate funds to smaller companies and seek opportunities in cyclical/inflation themes.

Goldman Sachs research fund flow expert Scott Rubner stated that fund inflows remain positive, overall market conditions remain optimistic as corporate buybacks remain strong, hedge funds are levering up again, hedge positions are being reduced (VIX index at 14.94), and seasonal factors are showing positive trends. From a fund flow perspective, long-term investors bought a net of $12 billion last week, while hedge funds' fund flows remained balanced.

And in order of buying preference, the sectors with the largest buying inclinations are: utilities, financials, andReal Estate Investment TrustIn the macro products and technology sector, the only sector Goldman Sachs traders slightly leaned towards selling was healthcare. Data shows that last week's best-performing sectors included bitcoin, popular retail stocks, stocks with outstanding performance in the past 12 months, software stocks, and regional bank stocks, all with gains exceeding 10%. The worst-performing sectors included weight loss drugs dropping by 2% and renewable energy dropping by 1%.

In the derivatives market, the trading mainly chasing call options pushed up the VIX. Last Friday, the skew towards S&P call options reached the flattest level in the past year, with volatility trading showing an 'underlying price increase, volatility increase'.

As the market rose, some Goldman Sachs clients continued to cash in on the profits from trading the financial sector in the elections. Financial stocks had unprecedented buying activity before, as well as a surge in call options and spread options trading for SPY. Additionally, there was a significant increase in trading volume for Tesla, with trading contracts exceeding 4.8 million (the highest level since 2021).

A closer look at Goldman Sachs' prime brokerage business reveals market euphoria, with a significant increase in trading activity on the firm's prime brokerage books, marking the highest increase since September 2022. Last week's actual buying volume in US stocks was the second highest in the past five years, only behind March 2023.

Regarding hedge funds, after a sharp deleveraging week before the elections, hedge funds leveraged up again, and reduced macro hedge positions after the election results became clear. Although the total leverage of long-short funds trading US stocks remains relatively low compared to the past year, their 'net leverage' increased at the fastest pace since November 2022, reaching a new high for the year.

Data shows that long-short funds' performance estimates rose by 2.37% during November 1st to November 7th, with the total leverage ratio rising to 187.0% and the net leverage ratio rising to 59.1%. Specifically, macro products (combined indices and ETFs) accounted for 70% of the net buying volume, driven by long positions and, to a lesser extent, short covering. Hedge funds reduced macro hedges after the US elections, with net short positions in US-listed ETFs recovering by 3.2%, marking the largest weekly decline since mid-August and the highest amount of covering in small-cap and large-cap ETFs. Furthermore, individual stocks saw a net inflow for the sixth consecutive week, with long positions exceeding short sales.

Trading flows indicate a shift in funds towards consumer, financial, and TMT sectors, while defensive/high dividend yield stocks such as consumer goods, real estate, utilities, and healthcare were net sold off.

The financial sector was one of the best-performing sectors in the USA last week, with hedge funds net buying for three consecutive days (four out of five days), with long positions exceeding short sales. The nominal long position volume in the American financial sector last week was the highest since February 2021, with consumer finance, capital markets, and financial services being the most net-purchased sub-industries. However, year-to-date, the American financial sector remains a net selling sector, with net allocation still well below the five-year average level.

This frenzy is not only reflected in Goldman Sachs' main brokerage business, but also extends to the futures market. Goldman Sachs' Robert Quinn wrote in the bank's 'Weekly Overview' that non-market maker S&P futures hit record positions.

Overall, Goldman Sachs believes that 'this week's price performance has effectively driven the overall existing net long positions, further increasing them due to additional positions'. As a result, almost everyone in the market who could hold long positions has already taken action.

The translation is provided by third-party software.


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