[Goldman Sachs Research Indicates U.S. Stock Market Deleveraging Nearing Completion, Expected to Maintain Range-Bound Movement in August]
According to Tide Research, Goldman Sachs' July 29 research report pointed out that the global account total leverage ratio is at the 93rd percentile over a 5-year lookback period, with hedge fund long-short ratios dropping from 5.7x to 3.2x, and deleveraging progress exceeding 90%. In July, U.S. equity funds saw net inflows of $34 billion. The S&P 500 fell below the short-term trigger level of 7453 points, which could prompt concentrated CTA selling if further declines occur. Goldman Sachs estimates systematic strategies hold approximately $196.3 billion in U.S. equity long positions, with CTA holdings at the 44th percentile. Goldman Sachs predicts that U.S. stocks will primarily exhibit range-bound movement in August. Buybacks are expected to support buying activity in August, with approximately 31% of S&P 500 constituent stocks in their buyback window. Over 90% of companies are anticipated to exit their quiet period by mid-August. Seasonal outflows, quantitative selling, and conservative institutional positioning are likely to constrain upward momentum. Goldman Sachs recommends inverse diversification strategies and IWM put options as hedging tools.
