Goldman Sachs traders believe that the "quick money" fund is expected to return to buying stocks.
The trading department of Goldman Sachs Group said that after reducing their stock exposure to multi-year lows during the recent market sell-off, systematic investors are expected to re-enter buying stock mode. In a report to clients on Monday, Goldman Sachs said that the so-called "fast money" group, including commodity trading advisers and volatility target strategies, sold around $240 billion of global stocks during the market downturn over the past month. This selling pressure appears to be easing, with traders estimating that this group could net purchase around $55 billion in the next month, including around $20 billion in US stocks. Goldman Sachs predicts that any such operation will be gradual, with only around $5 billion in buying pressure in the next week. The bank stated that this may mean their short-term impact on the market will be relatively limited. "This mechanical buying pressure is improving, but instead of providing immediate relief, it's more like a tailwind at mid-month," wrote Goldman Sachs Managing Director Lee Coppersmith.
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