Wall Street titan Goldman Sachs says hedge funds are cutting back investments in bank stocks.
Citing data from Goldman Sachs prime brokerage desk, Reuters reports hedge funds dumped bank stocks for the second straight week and bought consumer staple stocks at the fastest pace in nearly two years.
[adinserter block="1"]The funds are exiting long positions in US banks and global financial services companies while adding short positions on European financial stocks.
Goldman says banks, financial services firms and insurance companies were net sold while those involved in trading and consumer finance were net bought.
The moves come as Wall Street’s record rally is set to be put to the test this week, as major banks release their second-quarter earnings reports.
Meanwhile, hedge funds are buying consumer staples, which include food, beverages and tobacco that tend to be insulated from economic downturns because they are essential items.
Goldman says this is the most net-bought stock sector at the Goldman Sachs prime brokerage desk this month.
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