Global equities were net sold for ninth-straight week - Goldman Sachs

Investing.com -- Global equities were net sold for the ninth straight week in the period between Sept. 6 to Sept. 12, according to analysts at Goldman Sachs.

In a note to clients dated on Friday, the investment bank said gross trading flow also saw its largest increase in five months, "driven by short sales outpacing long buys."

Financials, healthcare, industrials, and communication services were the most net bought sectors, Goldman Sachs noted. Financials in particular saw their largest net buying since June 2023 after being net sold in seven of the last eight weeks.

Information technology, staples, and consumer discretionary were the most net sold industries.

With the exception of real estate and utilities, all sectors saw an increase in gross trading activity, Goldman Sachs said.

In the previous trading week ended on Friday, all three of the major averages on Wall Street advanced and ended dealmaking near two-week highs. Rising bets that Fed could roll out a 50-basis point reduction, rather than a more modest 25-basis point drawdown, after its two-day meeting on Sept. 17-18 powered equities higher.

Small firms were key beneficiaries of the increased wagers on a deeper cut, with the Russell 2000 small-cap index adding 4.4% for the week. These companies rely heavily on floating interest rate loans to fund their operations, leaving their shares more exposed to changes in borrowing costs.

According to CME Group's (NASDAQ:CME ) closely-monitored FedWatch Tool on Monday, the odds the policymakers will roll out a 50-basis point cut stood at 59%. Over the weekend, bets between a quarter-point and half-point decrease were equal, in the latest sign of the rapidly shifting debate around the cuts.

Just last week, investors, persuaded by data  showing slightly hotter-than-anticipated producer and consumer price growth in August, had placed a higher chance on a quarter-point cut.

But recent media reports have suggested that the argument for a 50-point reduction remains in play, while former New York Fed President Bill Dudley said the case for such a cut was strong.

Source: Investing.com