Craziest since 2016! Goldman Sachs: Hedge funds aggressively short US stocks during last week's market crash

Due to increasing concerns in the market that artificial intelligence may disrupt business models, hedge funds are starting to short sell US stocks. Goldman Sachs' chief brokerage team pointed out in a client report that last week, the nominal short selling volume of individual stocks reached the highest level recorded since 2016. The team (including Vincent Lin) cited fund flow data from January 30 to February 5, stating that the short selling volume was twice the buying volume. Concerns that artificial intelligence will change the economy have led to a turbulent week on Wall Street. The launch of a new tool by Anthropic company aimed at automating tasks in multiple industries triggered a sell-off. Last week, the market value of 164 stocks in the software, financial services, and asset management sectors evaporated by $611 billion. Overall, hedge funds have been net selling US stocks for the fourth consecutive week, with the selling magnitude reaching the largest since the "liberation day" in early April last year. The Goldman Sachs team stated that the information technology sector experienced the strongest selling pressure, with the outflow reaching the second highest level in the past five years. The sell-off in the software sector was the most severe, accounting for approximately 75% of the net selling amount in that sector. The net exposure of funds to software stocks dropped to 2.6%, and the long-short ratio also declined to 1.3, both reaching historic lows. Semiconductors and semiconductor equipment, as well as IT services, were among the few technology-related areas that experienced net buying this week. The semiconductor stock index rose last week, intensifying the divergence between chip stocks and software stocks. In recent months, this divergence has been widening as investors sell off industries they fear may be impacted by artificial intelligence. Apart from tech stocks, hedge funds continue to shift towards defensive sectors. The Goldman Sachs team stated that the healthcare sector was the most net bought sector last week, and it has now become the sector with the most inflow of hedge fund funds so far this year, surpassing the industrial sector. The stock market bounced back on Friday due to bargain hunting, but the Nasdaq 100 index still recorded its worst weekly performance of the year.