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