Goldman Sachs: Hedge funds are snapping up US technology stocks as interest rates fall.

According to a client report from Goldman Sachs seen by foreign media on Monday, hedge funds bought US technology and media stocks at the fastest pace in four months last week, stimulated by expectations of a 50 basis point interest rate cut by the Federal Reserve. The rate cut is expected to boost industrial spending, make it easier for companies to borrow at lower costs, and allow consumers to purchase technology products, all of which could benefit the industry's stock prices. Last week, the Federal Reserve's first rate cut in four years boosted US stocks as concerns of an economic recession eased and investors digested the impact of loose monetary policy, with the S&P 500 index rising 1.15% on Friday. The report from the institutional brokerage firm stated that hedge funds' long positions betting on the rise of information technology stocks were almost three times the long positions betting on the fall of information technology stocks. Goldman's report stated that buying in semiconductor and related equipment companies exceeded selling in technology hardware companies such as computer, display, and hard drive manufacturers. The report also mentioned that hedge funds increased their long positions on interactive media and entertainment companies while adding short positions, anticipating a decrease in asset value. The report mentioned that the technology and media sectors currently account for nearly one-third of the overall investment portfolio net exposure in the US. In comparison, consumer products have the largest sales volume in Goldman's institutional brokerage business. The report showed that selling pressure exceeded buying pressure in non-essential US consumer stocks like hotels and restaurants for the first time in four weeks, with the industry experiencing the largest net selling in a year. Furthermore, the report mentioned that the total leverage ratio (i.e. the total amount of borrowing and investment by hedge funds) has reached around 278%, the highest level so far this year.