Goldman Sachs: Stock Sell-off Expected to Reach $40 Billion Next Week
BlockBeats News, November 21st, Goldman Sachs said in a note to clients that the S&P 500 index has dropped below a closely watched level, giving a green light to hedge funds that trade stocks based on trends, which may sell nearly $40 billion worth of stocks in the coming week. The S&P 500 index fell below 6725 points on Wednesday. In a note to clients later that day, Goldman Sachs stated that trend-following hedge funds see this threshold as a signal to either sell positions or increase short bets on further stock declines. According to Goldman's calculations, after the stock price falls below this number, around $39 billion in global stocks may be sold in the following week. If the stock price continues to fall, the bank estimates that systematic trend-following hedge funds could sell up to approximately $65 billion in stocks.
Trend-following hedge funds aim to capitalize on signals of market trends at their inception, whether they are upward or downward. These signals can be based on trading volume in the market, price, or the speed of asset price changes during a trading day. Goldman's report stated that before the stock sell-off began, these hedge funds had a long position of around $150 billion in global stocks. Goldman said the last time stock prices fell below these closely watched levels was in October, and before that, on April 2nd, US President Trump announced a series of tariff proposals. (Jinse Finance)
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