US equities see largest net buying in 4 months after 8 weeks of outflows: GS

Investing.com -- US equities recorded their largest weekly net buying activity in four months, marking a sharp reversal after eight consecutive weeks of selling, according to a report by Goldman Sachs, driven by long buys and short coverings.

While macro products, including indexes and exchange-traded funds (ETFs), saw a slight net sell-off, this was primarily due to an increase in short sales, Goldman notes. US-listed ETF shorts rose by 1.3%, with significant shorting observed in large-cap equity and corporate bond ETFs.

Single stocks, however, stood out with the largest net buying since December 2021. Seven out of eleven sectors experienced net buying over the past week, with Healthcare, Financials, Industrials, and Information Technology leading in notional terms.

Conversely, sectors known for high dividend yields, such as real estate, utilities, and consumer staples, saw net selling.

Information technology emerged as the top-performing US sector during the week and also ranked among the most net bought sectors. Within the sector, software, followed by tech hardware, saw the most net buying, while semiconductors and semi equipment subsectors saw the most net selling.

“Despite the recent uptick, net positioning in US Software stocks remains low, with aggregate long/short ratio currently in the 42nd percentile vs. the past year and 9th percentile vs. the past five years,” Goldman’s report says.

The healthcare sector also witnessed significant buying interest, with managers net buying US healthcare stocks for the third consecutive week and at the fastest pace in more than a year. Biotech, pharmaceuticals, and healthcare providers and services led the buying within the sector.

In the ETF space, volumes dipped toward the week's end, with attention largely centered on China positioning. From Monday to Thursday, China ETFs saw inflows totaling $5.5 billion as the broader market continued to experience net buying.

Performance-wise, US equities had a mixed week. After pulling back to pre-NFP levels on Monday, the market rebounded on Tuesday and Wednesday but struggled after Thursday’s CPI data exceeded expectations.

The Nasdaq outperformed, driven by renewed enthusiasm for AI, while the Russell 2000 lagged as rising rates and inflation concerns weighed on smaller stocks.

Source: Investing.com