After two consecutive weeks of buying US stocks, the US stock market reached an all-time high, and smart money started selling again.

According to the latest weekly report from Goldman Sachs, in the past week, hedge funds sold US stocks, giving up 25% of the long positions they had recently established, with short selling transactions being more than twice the amount of purchases.

Macro products (a combination of indices and ETFs) accounted for almost all of the net sales in the United States, with net sales in three out of the past four weeks, and short selling transactions were more than three times the amount of purchases.

Last week, the nominal amount of short selling of macro products was the largest since the beginning of January, reaching the 97th percentile in five years. Goldman Sachs trader John Flood pointed out that this indicates an increase in hedging activities by hedge funds.

However, US individual stocks saw net purchases for the fourth consecutive week, with the amount of purchases being 1.6 times that of short selling.

Among them, the industries with the most net purchases in the United States are healthcare, utilities, and industrial sectors, while the industries with the most net sales are non-essential consumer goods, finance, and real estate.

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Before last week, US hedge funds last week bought US stocks at the fastest pace in four months, with the largest net purchase since December 23, driven mainly by long purchases and a smaller degree of short covering. Among the stocks purchased, information technology stocks were favored, with hedge funds net purchasing for the third consecutive week and at the fastest pace in five months.

US hedge funds continue to increase their net exposure to healthcare, maintaining an overweight position.

Last week, US hedge funds bottom-fished in healthcare stocks (up 2.1 standard deviations), mainly due to long purchases and short covering. Healthcare has been the industry with the most net purchases in the United States since October, with net purchases for five consecutive weeks.

Most sub-industries under the healthcare sector saw net purchases last week, mainly including pharmaceuticals, healthcare providers and services, as well as medical devices and supplies.Currently, hedge funds have increased their overexposure to the healthcare sector by 8.8 percentage points, which is close to the highest overexposure level in the past five years relative to the S&P 500 Index. The overall long/short ratio for U.S. healthcare is now at 2.45, the highest level since January, and it is at the 46th percentile over the past five years.

U.S. Hedge Funds Underexposed to Real Estate Stocks

Over the past four weeks, hedge fund managers have net sold real estate stocks, with short sale transactions being six times the amount of purchases. Among them, specialized Real Estate Investment Trusts (REITs) and residential REITs were the sub-sectors with the most net sales last week, while real estate management and development and industrial REITs saw moderate net purchases. Currently, hedge funds' underexposure to the REIT sector has decreased by 1.6 percentage points, which is the lowest level since January relative to the S&P 500 Index, and it is at the 20th percentile over the past five years.

Last week, "Pure Long" showed a slight net purchase

In addition to hedge funds, Goldman Sachs' equity sales trading department noted that last week, "pure long" positions ended up with a slight net purchase, with the largest purchases in the energy, technology, and industrial sectors, while communication services saw net sales. However, Goldman Sachs pointed out that the overall transaction volume last week was relatively low. Looking back at previous U.S. presidential elections, except for 2008, transaction volumes generally decreased before Election Day and then sharply increased after the president-elect was determined, usually maintaining around 30% of the overall transaction volume.It is worth noting that data from Goldman Sachs Private Banking shows that mega-cap technology stocks have generally seen net buying since October, mainly due to short covering, with relatively less contribution from long position purchases. However, from a position holding perspective, the net allocation and long/short ratio of this group are both significantly lower than the levels when entering the first and second quarter earnings reports, which is favorable for the third quarter earnings.