Goldman Sachs' trading desk stated that systematic investors are preparing to pivot back to buying stocks after slashing equity exposure to multi-year lows during the recent market sell-off.
Goldman Sachs said in a report to clients on Monday that these so-called “fast money” flows—including Commodity Trading Advisors (CTAs) and volatility-targeting strategies—sold approximately $240 billion in global equities during the market decline over the past month. However, this selling spree appears to be waning: traders expect the group could turn into net buyers of about $55 billion in the coming month, with roughly $20 billion of that flowing into U.S. equities.
Goldman Sachs anticipates that this shift will be gradual, with buying pressure amounting to only about $5 billion in the coming week, meaning the short-term impact may be limited.
“This mechanical buying is improving, but it is more of a mid-month tailwind rather than providing immediate support,” wrote Lee Coppersmith, a Managing Director at Goldman Sachs.
This shift could signal that the current U.S. equity market sell-off is nearing a turning point. Previously, pressured by the surge in oil prices triggered by the war involving Iran, investor sentiment had been weighed down, with the S&amp;P 500 at one point falling about 9% from its all-time high. While the U.S. stock market has shown initial signs of a rebound recently, the trajectory of the conflict remains highly uncertain.
The strength of a short-term rebound will determine the aggressiveness with which these funds add to their positions. Goldman Sachs’ models show that if the S&amp;P 500 rises by about 8% over the next month, global buying by systematic funds could expand to $220 billion, with more than half flowing to the U.S. market; conversely, a further decline of about 10% could trigger an additional sell-off of approximately $110 billion.
Key technical levels may guide the market's direction. Paul Leyzerovich of Goldman Sachs pointed out that the 6720 to 6740 range for the S&amp;P 500 is a critical “re-entry zone,” where short-term and medium-term trend signals will turn positive, potentially accelerating inflows for trend-following strategies. The index is currently trading around the 6600 level.

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Goldman Sachs stated in a report to clients on Monday that so-called “fast money” flows—including Commodity Trading Advisors (CTAs) and volatility-targeting strategies—sold approximately $240 billion in global equities during the market downturn over the past month. However, this selling pressure appears to be waning: traders expect that the group could pivot to net buying of about $55 billion in the coming month, with approximately $20 billion of that flowing into U.S. stocks

- Goldman Sachs reports that systematic investors are preparing to buy stocks again after reducing exposure to a multi-year low during a recent market sell-off.  
- This group, referred to as "fast money," sold approximately $240 billion in global stocks over the past month but may turn net buyers of about $55 billion in the next month, with $20 billion targeting U.S. stocks.  
- The change could signal a turning point for the U.S. market sell-off, influenced by fluctuating investor sentiment amid ongoing geopolitical tensions.

Goldman Sachs: Systematic Funds Expected to Pivot Back to Buying U.S. Stocks