Hedge funds ditched short bets against U.S. regional banks as of the end of August and turned bullish on the broader U.S. financial sector, according to a Goldman Sachs note, just as bank stock prices began to rise.
U.S. financial services companies including banks, trading firms and those working in capital markets were among the most sought-after stocks in the week ended Sept. 1, according to the note by Goldman’s prime brokerage desk, which serves hedge funds.
The ratio of long trades compared with short positions on U.S. regional banks has risen by 26% since a year low in mid-July 2023, when traders were mostly short the sector, the bank said. A short or bearish bet borrows a stock in order to sell hoping its price will decline.
Source: Investing
