CTAs seen buying U.S. regardless of the market conditions: Goldman Sachs
Investing.com -- Commodity Trading Advisors (CTAs), also known as trend followers, are projected to purchase U.S. stocks and sell global equities, regardless of the market’s performance, according to Goldman Sachs’ trading desk.
The group is currently shorting $55 billion in global equities and $31 billion in US stocks. This significant reduction of risk in the US indicates that these systematic strategies will focus on buying in the region.
Goldman’s traders estimate that CTAs will sell between $10 billion and $24 billion worth of stocks this week. However, they are also expected to purchase between $3 billion and $7.4 billion of S&P 500 during the same timeframe, depending on market fluctuations.
Cullen Morgan, an equity derivatives trading specialist, noted that the systematic macro global equity length is nearing its historical minimum.
He further added, "Over the next week and month, we have them as buyers of US equities in every scenario." This suggests that regardless of the market conditions, CTAs are expected to continue their buying trend of US stocks.
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