Key Takeaways:
Systematic investors are set to reverse course and begin buying stocks again after reducing their equity exposure to multi-year lows during the recent market sell-off, according to Goldman Sachs Group Inc.'s trading department.
"The wave of selling appears to be abating," Goldman's trading desk said in a note to clients on Monday.
So-called "fast money" groups, which include Commodity Trading Advisors (CTAs) and volatility-targeting strategies, sold off approximately $240 billion in global equities over the past month as markets fell. Now, the bank's traders estimate that the group could become net buyers of around $55 billion over the next month, with about $20 billion of that directed towards US stocks.
This anticipated shift from major systematic funds could provide significant support for global equity markets, potentially fueling a rebound or stabilizing prices. The expected inflow of capital is particularly noteworthy for the US market, which is projected to capture a substantial portion of the buying activity.
This article is for informational purposes only and does not constitute investment advice.
