Key insights
- Goldman Sachs projects CTAs will buy $34B of S&P 500 stock next week, driven by positive momentum signals and the closing of short positions. This could provide a short-term boost to the index. The S&P 500 market-on-close imbalance registered $3.8 billion to buy in the most recent session. However, revised consumer spending forecasts and ongoing oil supply constraints present potential headwinds.
Investing.com - Goldman Sachs projects that commodity trading advisors will purchase $34 billion of S&P 500 stock over the next week at current market levels, according to the firm’s model.
CTAs are currently short $30 billion in S&P 500 positions. The anticipated buying would close out these short positions and flip the positioning to long, Goldman said.
All three CTA momentum thresholds moved into positive territory following the recent market move. The short-term threshold stands above 6,713, the medium-term above 6,734, and the long-term above 6,400. The SPDR S&P 500 ETF Trust (SPY) currently trades at $679.79, just 3% below its 52-week high of $697.84, with a strong 1-year return of nearly 25%. According to InvestingPro, which tracks over 1,400 additional metrics and provides exclusive ProTips for market positioning analysis, SPY maintains a "GOOD" financial health score.
The S&P 500 market-on-close imbalance registered $3.8 billion to buy in the most recent session. Goldman said it is monitoring whether this trend continues over the coming week.
The firm’s analysis focuses on systematic trading flows from CTAs, which use momentum-based strategies to determine market positioning.
In other recent news, Goldman Sachs has adjusted its forecast for U.S. consumer spending growth in 2026, lowering it to 4.2% from an earlier estimate of 5.1%. This revision is attributed to the rising oil prices caused by ongoing disruptions in the Middle East, particularly affecting oil flows through the Strait of Hormuz. Meanwhile, JPMorgan Chase reported that U.S. consumer spending growth accelerated to 5.8% year-over-year in March, with discretionary spending showing a stronger increase than non-discretionary spending.
In the energy sector, Bank of America highlighted that despite a two-week ceasefire allowing tanker passage through the Strait of Hormuz, significant oil supply constraints remain, with 11 million barrels per day of production still offline. Jefferies noted that the ceasefire announcement between the U.S. and Iran brought some relief to markets, as it averted potential military action. However, the ceasefire is temporary, and the situation remains delicate.
Morgan Stanley observed that hedge funds have been reducing their exposure in Asian markets following tensions in the Middle East, with Korea and China A shares seeing the most significant reductions. These developments reflect the broader impact of geopolitical events on global markets and consumer behavior.
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