Hedge Fund's New Move in US Stocks! Goldman Sachs: This Time It's About Consumer Stocks

Goldman Sachs' data shows that hedge funds are betting on a difficult period for American consumers.

Hedge funds bearish on non-essential consumer stocks

According to Goldman Sachs' prime lending business data, hedge funds sold non-essential consumer stocks last month while buying essential consumer stocks.

Goldman Sachs stated that the ratio of short positions to long positions was 1.4:1, with the most significant increase in short positions seen in the hotel, restaurant and leisure, professional retail, and automotive industries.

Goldman Sachs' data shows that, especially in the professional retail sector, the current overall long/short ratio is 1.13, lower than July's 1.35, reaching a one-year low.

One of the indicators measuring retail stocks, the SPDR S&P Retail ETF (XRT), has only risen by 3% this year, while the S&P 500 index has increased by 17%.

Real interest rate levels put pressure on economic performance

Despite a relatively healthy balance sheet, there are still many concerns, from rising credit card delinquency rates to the resumption of student loan repayments starting on October 1.

The recent earnings season has had mixed results, and Goldman Sachs will hold a retail conference in the next two days, where executives may further express concerns about the U.S. economy.

Hedge fund manager Bill Ackman correctly bet on the U.S. economy at the beginning of the COVID-19 pandemic. He stated on the Julia La Roche Show that the U.S. economy is still in good shape, but certain sectors will be affected.

He said, "Real interest rates are now meaningfully positive, which is starting to slow down the economy. Mortgage rates are high, car repayments are high, credit card rates are high, and inflation is making prices much higher." "These things will eventually dampen economic growth."