Global equities net sold for the 7th straight week, Financials hit hardest

Global equities experienced net selling for the seventh consecutive week, according to the latest Goldman Sachs Prime Services weekly report.

That trend was observed across most regions, with the exception of Europe, where equities were still net sold. The most significant selling activity was noted in Developed Markets (DM) Asia, North America, and Emerging Markets (EM) Asia.

Overall, gross trading flow increased during the week, driven by short sales outpacing long buys at a ratio of 1.7 to 1, according to Goldman Sachs.

The report notes that single stocks were net sold for the third straight week, predominantly led by short sales. In contrast, macro products saw net buying for the third consecutive week, led by long buys. 

Of the eleven global sectors, eight were net sold, with Communication Services, Financials, and Staples leading the sell-off. Meanwhile, Industrials, Health Care, and Information Technology were the only sectors that experienced net buying.

Financials, in particular, saw significant selling pressure, marking the fourth consecutive week of net selling for the sector. This selling trend was evident across almost every region, with short sales outpacing long buys by nearly 2 to 1.

“Financials was net sold in every region (sans EM Asia) this week, led in notional terms by North America, DM Asia, and Europe,” Goldman’s report states.

The Wall Street bank further details that within the financials sector, subsectors such as Insurance, Capital Markets, Mortgage REITs, and Banks were all net sold. However, there was modest net buying in Consumer Finance and Financial Services.

“Financials now makes up 12.4% of total global net exposure, near 1-year highs, but still below 5- year averages in the 35th percentile,” per the note.