Hedge funds sell individual shares at the fastest pace in years, because tariff threats and recession fears have sent the market in a downward play.
Professional fund managers have reduced their positions in recent days with the largest amount in more than two years.
Part of their activity is comparable to March 2020, when portfolio managers reduce their exposure to the stock market as the COVID-19 Pandemic hit, Goldman Sachs said in a note on Monday.
A hedge fund is a partnership of private investors whose money is merged and managed by professional fund managers. These managers use a wide range of strategies, including both long and short positions on shares.
On Friday last week and on Monday this week, managers reduce their risky investments by selling some shares dramatically and covering shorts.
Their movements came when the stock market became more and more volatile.
Uncertainty about rates led to a sale last week, in which all three large indexes ended the week in the red.
This took place until Monday, when Wall Street started the week with one of the worst day in three years, while investors struggled with economic uncertainty and fresh turbulence from Washington.
Hedge funds sell individual shares at the fastest pace in years, because tariff threats and recession -fears have sent the market in a precipitation
The industrial average of Dow Jones fell more than 2 percent, the S&P 500 tumbled 2.7 percent and the technically heavy Nasdaq lost 4 percent on the day's trade.
This marked the worst session for the index since September 2022.
Some of the stumbling came when investors who were made by President Trump on Sunday struggled with comments from President Trump.
In a Fox News interview, Trump refused to exclude the possibility that his aggressive trade policy could push the US into a recession.
In general, the S&P 500 has fallen by around 9 percent compared to its recent peak.
Brad Gerstner, founder and CEO of Altimeter Capital, told CNBC that he has reduced the risk exposure of his company.
'We have high economic uncertainty, high political uncertainty and high technological uncertainty. Only one thing can happen, “he said.
'Discussions must rise. Risk premiums must rise. … so for us that was just a period to say, “Okay, we go to the sidelines to wait.”
Hedge funds have settled long and short positions that Goldman Sachs said they were busy, or usual with many investors.
Uncertainty about rates led to a sale last week, in which all three large indexes ended the week in the red
In a Fox News interview on Sunday, Trump refused to exclude the possibility that his aggressive trade policy could push the US into a recession
Sharing sale took place until Tuesday, but the market was recovered somewhat on Wednesday after the February inflation report was lower than expected.
Inflation delayed in February after surprisingly hot data in January.
The price delay saw share faithes whipsaw between profit and losses.
The consumer price index (CPI), which measures the price of the most common goods in the US, showed an annual increase in total prices in the economy by 2.8 percent.
This was under the predictions of economists and movement showed closer to the target of 2 percent of the Federal Reserve.
On Wednesday the S&P 500 and the Nasdaq closed in the Green.
“The lower than expected CPI report for February brings a sigh of lighting to investors,” Bret Kenwell, the American investment analyst at Etoro, told The Daily Mail.
“A reassuring inflation report is not enough to undo all recent losses, but it can help start a much -needed auxiliary prally, because the S&P 500 is about to be a correction area.”
