Hedge funds post broadest losses since Covid as AI stocks slide (opens the source in a new tab)
- Bloomberg reports, citing Goldman Sachs's prime brokerage, that Thursday's tech sell-off pushed all three broad equity hedge fund strategies down more than 1% on the same day for the first time since Covid; about two-thirds of funds lost money.
- In FT's Unhedged, Robert Armstrong says Treasuries rallied hard, with the Bond yield The annual return a bond pays at today's price; rising yields mean borrowing is getting dearer. falling to 4.96%, and calls it a fear-driven, risk-off move rather than a bet on lower inflation or rate cuts.
- He notes losses are concentrated in Hyperscaler The giant cloud companies (Amazon, Microsoft, Google, Meta, Oracle) that build the biggest data centres., chipmakers and data-centre builders, while defensives such as consumer staples have rallied; strong consumer spending and earnings still support stocks.
- 4.96%
- 10-year Treasury yield after Thursday's rally (FT)
- 2/3
- of hedge funds down on Thursday (Goldman, via Bloomberg)
Why it matters When stock pickers, quants and multi-strategy pods all lose on the same day, diversification fails where it should work. The AI trade has become the market's biggest shared risk.
Other side Armstrong notes the economy and earnings remain strong, and most S&P 500 stocks are up since early October. One bad day in earnings season may be a rotation, not the start of winter.