No matter which way markets go, Goldman Sachs Group Inc. says some traders are modeled to sell stocks over the next week.
Cullen Morgan, an equity derivatives and flows specialist at the bank, expects that commodity trading advisers, or CTAs that surf the momentum of asset prices through long and short bets in the futures market, could be forced to sell after building $129 billion in long positions.
The trend-following cohort are modeled to sell $10 billion in a rising market, and up to $42 billion if stocks decline, over the next week. On a longer time frame of one month, CTAs are likely to buy $42 billion in a rising market versus $226 billion to sell should markets start to trend lower again.
Global stocks have been rising this year, with the S&P 500 Index setting record highs powered by large cap technology stocks like Nvidia Corp. and Microsoft Corp.
Nasdaq 100 futures positioning is near the highest in three years, with investors appearing to favor growth stocks, into the earnings season, a Citigroup Inc. team led by Chris Montagu wrote in a note. Positioning is now considerably extended long and one-sided, rising a further $3.4 billion last week to roughly $25 billion.
“Profit levels, in particular for Nasdaq are the growing concern, with positioning and profits extended,” Montagu said. “The average long position is near 5% in profit, elevating the risk of profit taking unwinds and creating a potential headwind for a continued rally in the near term.”
Advisors must navigate misinformation and generational expectations as technology reshapes client relationships.
The regulator has been trying to reach imprisoned advisor Jason Foley.
Magnificent 7 firm continues to ‘right size’ workforce in AI-related shift also seen in financial services.
Healthcare inflation running at 280% of CPI - and most HSA holders are sitting in cash.
New research identifies the practice habits driving 121% DC AUM growth among the industry's top performers.
Knighthead Life entered the market with a competitive MYGA. A strong launch earned advisor confidence and paved the way for FIAs.
As AI makes financial information more accessible than ever, Lana Hock explains why human judgment, trust, and empathy remain the qualities clients value most in a financial advisor