To The Moon

In a note to clients, $Goldman Sachs(GS)$ said that the $S&P 500(.SPX)$ index falling below an important level has given hedge funds that follow market trends, signal to possibly sell nearly $40 billion worth of stocks in the next week.

By next week, it means the week of 24 Nov 2025, as the note (to clients) was sent on Thu, 20 Nov 2025.

On Wed, 19 Nov 2025, the S&P 500 (.SPX) index, declined in value past a threshold of 6,725 on Wednesday. It closed the day at 6,642 level. (see below)

As of 21 Nov 2025

After prices fell below 6,642, GS's calculations suggest that over the next week, $39 billion of global equities might be sold.

If stock prices extend falls, the bank estimates that systematic trend hedge funds could sell as much as around $65 billion.

Trend-following hedge funds aim to capitalize on signals on the start of market trends - whether up or down.

Signals can be based on :

• Volume of traders in a market.

• Price.

• How fast an asset price changes during trading day.

GS also revealed that before stocks began to sell off, these hedge funds were long around $150 billion worth of global equities.

The last time prices fell through one of these closely watched levels was in October and prior to that, on 02 Apr 2025 when Trump announced a raft of tariff proposals. (see above)

My viewpoints: (mine only)

I think the negative sentiments was due to a very short 3½ days, trading week due to Thanksgiving public holiday.

This week will also see “delayed” US economic reports playing catch up as they are released progressively throughout the week.

• Tue, 25 Nov 2025 - US Retail Sales (for Sep 2025).

• Tue, 25 Nov 2025 - Producer Price index (PPI) for Sep 2025.

• Tue, 25 Nov 2025 - Consumer Confidence report (for Nov 2025).

• Wed 26, Nov 2025 - Jobless claims (weekly & continuing). Weekly claim is expected to increase by 5,000 claims to 225,000 (after falling by -8,000 claims the week before).

Forecast vs MoM’s Performance.

Based on analysts’ consensus, below is the forecasts for US economic reports to be released this week:

The only plausible ‘improvement’ seems to be producer inflation under control for September 2025 (outdated data); no telling what October or November actuals would be, as we head towards end of Q4 2025.

Summary.

The S&P 500 index has cool from its high of 6,920.34.

There is a growing consensus among institutional strategists that current sell-off is not merely technical, but fundamental.

The "Cautionary Bloc" of analysts ($Morgan Stanley(MS)$, $JPMorgan Chase(JPM)$, $Bank of America(BAC)$) argues that the market is facing a triple-threat of:

• Valuation compression.

• Policy friction,

• Capital misallocation.

Key Bearish Drivers (Non-GS Consensus):

(1) The "AI Capex" Wall:

Sentiment has shifted from euphoria to scrutiny.

Based on BofA Global Fund Manager Survey, Oct '25:

• 45% of fund managers are identifying an "AI Bubble" as the market's top tail risk.

• With acute concern that massive tech capital expenditures are not generating immediate ROI, threatening a sharp repricing of the "Mega-Cap" growth premium.

(2) Tariffs as a "Stagflationary Tax".

Unlike previous trade disputes, the current tariff regime is being viewed by strategists from JP Morgan as a direct tax on consumption.

This "supply-side shock" is expected to simultaneously depress corporate margins and keep inflation sticky (above 3%), preventing the Fed from delivering the aggressive rate cuts the market has priced in.

(3) Bond Market Vigilantism.

Fiscal dominance is overriding monetary policy.

Accoring to Morgan Stanley, rising yields on the 10-year Treasury are tightening financial conditions from the outside in, effectively setting a "valuation ceiling" on equities that makes a P/E expansion mathematically difficult to justify.

S&P 500 End 2025 Prediction.

Above is the Cautionary Bloc’s prediction of where the S&P 500 index will be on 31 Dec 2025 vs S&P 500’s 02 Jan 2025 closing of 5,868.55.

End 28 Nov Review.

With the month of November 2025 firmly behind us, it is clear that GS’s prediction to clients did not materialize.

US stock market finished the holiday-shortened week ending 28 Nov 2025, with strong gains, as the Dow Jones, S&P 500, and Nasdaq Composite all posted their best weekly performance since 01 Jun 2025. (see below)

This broad-based rally was largely fueled by :

• Rising hopes for a Federal Reserve interest rate cut in Dec 9-10.

• Buoyed by dovish comments from Fed officials and some softer economic data.

When market closed for the last time in November 2025:

• DJIA : +0.61% (+289.30 to 47,716.42).

• S&P 5500 : +0.54% (+36.48 to 6,849.09).

• Nasdaq : +0.65% (+150.996 to 23,365.686).

Note: Despite the weekly surge, the Nasdaq Composite, driven by mixed performance in large-cap tech, ended its 7-month winning streak to close November slightly down at -1.97% (23,365.69)

The question remains on whether the bear will rear its ugly head in December 2025 ? I wonder, will it be a case of a “blue” Christmas to close off 2025 ?

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