GS Prime: Hedge Funds Gaining Momentum After Japanese Triggered Volatility; L/S Equity Leading The Way

The Bank of Japan announced a rate hike, triggering a sell-off of equities in early August, equity markets quickly bounced back delivering positive returns for the month. While in previous months the gains came mostly from mega-cap TMT names, in August broader sectors reported higher stock returns.

At the same time, medium and long-term interest rates were lowered while the Fed meeting in Jackson Hole was a much-awaited event for the first interest rate cut in September. Market participants were preoccupied with the timing and magnitude of the Fed cut rates, and the impact of AI themes on earnings. Now it is expected that the...