Goldman Sachs: US Stocks Range-Bound in August, Deleveraging Nearing End

TechFlow reports, According to TechFlow Research, Goldman Sachs' July 29 research report pointed out that the global account total leverage ratio's 5-year lookback percentile remains at the 93rd percentile, the hedge fund long-short ratio has dropped from 5.7x to 3.2x, and deleveraging progress exceeds 90%. In July, US equity funds saw a net inflow of $34 billion, the third highest for the same period in nearly 20 years. The S&P 500 fell below the short-term trigger level of 7,453 points; if it continues to decline, it will trigger concentrated CTA selling. Goldman Sachs estimates systematic strategies hold approximately $196.3 billion in US equity long positions, with CTA positions at the 44th percentile.

Goldman Sachs judges that US stocks are unlikely to see trend-driven movements in August, with overall range-bound trading prevailing. Buybacks are the most certain buying support in August; currently, about 31% of S&P 500 constituents are in the repurchase window, and it is expected that over 90% of companies will end the quiet period by mid-August. However, seasonal capital outflows, quantitative selling, and institutional conservative positioning jointly suppress upside potential. Goldman Sachs recommends reverse dispersion strategies and IWM put options as hedging tools.