Hedge funds are dumping these stocks most exposed to tight financial conditions

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Hedge funds turned bearish on financials and other stocks exposed to tightening credit conditions, according to Goldman.

As the banking crisis unfolded, hedge funds turned bearish on financials and other stocks exposed to tightening credit conditions, according to Goldman Sachs. The smart-money cohort has sharply reduced net exposures to "Lending Sensitive Stocks" in the aftermath of the collapse of Silicon Valley Bank, according to Goldman's prime brokerage data. These companies often have a high level of debt on their balance sheets, and they could be hurt by rising borrowing costs.

Goldman's basket of lending-sensitive stocks includes private equity firms Carlyle Group and KKR & Co , motorcycle retailer Harley-Davidson , hotel operators Hyatt Hotels , Marriott International and auto names General Motors and Ford Motor . Meanwhile, hedge funds have been dumping U.S. bank stocks amid the chaos with long/short ratio in that category standing at 1.28, near a 10-year low, Goldman said.

 

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