Goldman Sachs: Stock sell-off expected to reach $40 billion next week

Goldman Sachs said in a note to clients that the S & P 500 fell below a closely watched level, giving hedge funds that trade stocks on a trend the green light to sell nearly $40 billion of stocks in the coming week. The S & P 500 fell below 6,725 on Wednesday. Goldman's note to clients later in the day said trend-tracking hedge funds view the threshold as a signal to either sell positions or increase short bets that stocks will fall further. After shares fell below that number, $39 billion of stocks could be sold globally in the coming week, according to Goldman calculations. If share prices continue to fall, the bank estimates that systemic trend hedge funds could dump as much as about $65 billion in stocks. Trend-following hedge funds aim to take advantage of signals - either up or down - at the start of a market trend. These signals can be based on how quickly trading volumes, prices or asset prices in the market change over the course of the trading day. The hedge funds went long about $150 billion worth of global stocks before stocks began to sell off, the Goldman report said. Goldman said the last time stock prices fell below these closely watched levels was in October, after President Donald Trump announced a series of tariff proposals on April 2.