LONDON (Reuters) — Hedge funds purchased US tech and media shares on the quickest tempo in 4 months final week, stated a Goldman Sachs prime brokerage word to purchasers seen by Reuters on Monday, spurred by the Federal Reserve’s anticipated 50-basis level fee lower.
Falling charges are anticipated to rejuvenate industrial spending, making it simpler for firms to borrow cash at decrease prices and for shoppers to purchase tech merchandise, all of which could profit the inventory costs of those firms.
Hedge funds positioned virtually 3 times as many lengthy positions on the wager that data expertise shares would rise, in comparison with these with bets in opposition to them, stated the prime brokerage word.
Shopping for in semi-conductor and associated gear firms outweighed promoting in tech {hardware}, like pc, monitor and laborious drive producers, the Goldman Sachs word stated.
Hedge funds additionally ditched their quick place and added lengthy bets on interactive media and leisure firms, the word stated.
A brief place expects an asset worth to fall.
The broader expertise (XLK) and media sector now makes up virtually a 3rd of total U.S. web portfolio publicity, it stated.
Against this, client merchandise had been probably the most offered on Goldman Sachs’ prime brokerage e book, the word stated.
Promoting outweighed shopping for in U.S. client discretionary shares like lodges and eating places for the primary time in 4 weeks and the sector suffered the biggest web promoting in a yr, in response to the word.
Gross leverage, or complete hedge fund borrowing and investments, reached roughly 278%, among the many highest ranges seen this yr, it stated.
(Reporting by Nell Mackenzie; Modifying by Amanda Cooper and Emelia Sithole-Matarise)
