Hedge Funds Turn Cautious on Stocks Even as Wall Street Strategists Get Bullish
- Long-short gross leverage falls most since March 2022: Goldman
- Risks seen in Fed’s hawkish tone, narrow stock market breadth
This article is for subscribers only.
Wall Street strategists are rushing to raise their targets for the S&P 500 Index, but hedge funds are growing increasingly cautious about equities due to the Federal Reserve’s reluctance to cut interest rates, softer economic data and narrow stock market breadth.
Hedge funds decreased their long-short gross leverage, which measures their overall exposure to the market, by the most since March 2022, according to a note from Goldman Sachs Group Inc.’s prime brokerage desk. The move points to a more cautious stance from the so-called smart money, Goldman’s team wrote.