Trend followers to become a headwind for the stock market: Goldman

Goldman Sachs warns that trend-following systematic funds (CTAs) are set to become a near-term headwind for U.S. equities. The bank’s trading desk models CTAs selling stocks across scenarios over the coming week after CTA buying that had supported the market faded. The S&P 500 sits 3.8% and 4.8% above short- and medium-term thresholds that Goldman says could trigger as much as $50 billion in selling as funds flatten exposure. Systematic funds bought nearly $80bn in U.S. equities last month, leaving CTAs about $44bn long — creating vulnerability to sudden selling and downside pressure.