Hedge funds are dumping cyclical stocks at an aggressive pace:
The long/short ratio of hedge funds in US non-consumer cyclical stocks, which include Energy, Materials, Industrials, Financials, and Real Estate, is down to 1.68, the lowest since May 2025.
Hedge funds have sold stocks in these sectors for 9 consecutive weeks.
Sales accelerated after the Iran War began on February 28th, completely wiping out all cumulative net purchases since the start of 2025.
As a result, net trading flow has turned negative for the first time since May 2025, indicating that hedge funds are now net short this group of stocks.
Hedge funds are betting that the worst of the economic impact is still ahead.
The long/short ratio of hedge funds in US non-consumer cyclical stocks, which include Energy, Materials, Industrials, Financials, and Real Estate, is down to 1.68, the lowest since May 2025.
Hedge funds have sold stocks in these sectors for 9 consecutive weeks.
Sales accelerated after the Iran War began on February 28th, completely wiping out all cumulative net purchases since the start of 2025.
As a result, net trading flow has turned negative for the first time since May 2025, indicating that hedge funds are now net short this group of stocks.
Hedge funds are betting that the worst of the economic impact is still ahead.
