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Hedge Funds Rushed to Snap Up Stocks During CPI-Fueled Rally

  • Net buying hit three-month high as managers seek to catch up
  • S&P 500 advance of late has forced rethinking of bear market
Source: Goldman Sachs
Source: Goldman Sachs

Theories that this week’s big runup in stocks was fueled by equity skeptics getting forced out of bearish positioning are borne out by the data. 

With the S&P 500 mounting a 2% gain Wednesday, professional speculators such as hedge funds piled into shares while unwinding bearish wagers. Their nominal net purchases reached the highest level in more than three months, according to data compiled by Goldman Sachs Group Inc.’s prime broker.