Goldman Analysis: Index Comp and Equity

goldman analysis: Goldman Sachs Caption outside of wrapper for normal article images Month-to-date, the S&P 500 index SPX, 0.03%, Dow Jones Industrial Average DJIA, 0.13% and Nasdaq Composite index COMP, -0.11% have all gained roughly 2.5%. The Goldman analysis found that stock market exposure today is stretched due to rising demand for equities from various sources, according to Market Watch. Hedge fund net exposures are the highest since July 2018, passive equity funds inflows last week were the highest since March 2019 21 billion and foreign investor equity demand is one standard deviation higher than its average, Menon wrote. Today our sentiment indicator shows that aggregate equity positioning is 1.2 standard deviations above average, indicating that positioning poses a downside risk to S&P 500 index returns in the near future, wrote Goldman equity analysts, led by Arjun Menon, in a Tuesday research note. Net futures length and equity versus bond fund flows have also rebounded to their 52-week average from below average levels during the past few weeks, he added. Menon, however, believes the market will avoid this fate this time around, as he expects economic data to surprise to the upside. During the majority of instances when sentiment was as optimistic as it is today, the S&P 500 fell at least 2% over the subsequent two months. (news.financializer.com). As reported in the news.