Global Equities Observe Increased Buying Momentum

Global equities have seen net buying for a second consecutive week, with long positions outpacing short sales by a ratio of 1.9 to 1, according to a recent report by Goldman Sachs.

Trading Activity

Trading activity has gained momentum, marking the ninth consecutive week of increased volume. All major regions experienced net buying, particularly North America and developed markets in Asia. The inflows were attributed to both macro products and single stocks, comprising 60% and 40% of total net buying, respectively.

Sector Performance

From a sector perspective, Financials, Consumer Staples, Consumer Discretionary, and Real Estate were the most heavily purchased globally. In contrast, Information Technology, Materials, Communication Services, and Industrials experienced the most net sales. Notably, Consumer Staples demonstrated significant purchasing activity, with long buying exceeding short sales by a ratio of 5 to 1. This sector saw net buying across all regions, with Europe recording the largest inflows, followed by Asia and the US.

Goldman Sachs indicated that hedge funds have been steadily increasing their exposure to Consumer Staples stocks over the past five weeks. This week’s buying is the highest since August 2023 and ranks among the top 5% over the last five years. “Nearly all global Staples subsectors (except Personal Care Products) were net bought this week, led by Beverages and Food Products,” the report stated.

Regional Insights

In Japan, equities witnessed notable activity, with hedge funds increasing their net buying for the second week. The long/short ratio in Japanese stocks has reached a three-year high ahead of the upcoming Bank of Japan (BoJ) meeting. According to Goldman, Japan has emerged as one of the most purchased markets globally within prime brokerage accounts, particularly after the recent US elections.