How hedge funds have positioned for Trump's 'Liberation Day'

By Nell Mackenzie

LONDON (Reuters) -Hedge funds person scaled backmost risky bets and sought safety, information from Goldman Sachs shows, up of this week's wide anticipated announcement by U.S. President Donald Trump connected reciprocal tariffs that has fuelled commercialized warfare fears.

Trump has for weeks flagged April 2 arsenic a "Liberation Day" transportation day for his astir ambitious actions yet to upend much than fractional a period of planetary commercialized norms, which saw barriers to planetary commerce fall, but successful ways the president believes disadvantaged American goods and workers.

White House aides person drafted plans for tariffs of astir 20% connected astir of the $3 trillion of goods imported annually to the U.S., the Washington Post reported connected Tuesday.

Higher tariffs and little net estimates are apt to shrink the S&P 500's three-month returns by 5%, but U.S. markets should retrieve implicit the adjacent year, a Goldman lawsuit enactment connected Monday and seen by Reuters connected Tuesday showed.

Here's what Goldman Sachs premier brokerage says astir hedge money positioning. A premier brokerage table lends wealth to hedge funds for trading and tracks their activities.

1/ RETREAT

Hedge funds person reduced their nett vulnerability crossed each regions, particularly successful Europe, followed by emerging markets and Asia.

The magnitude traded connected transparent and non-transparent banal exchanges trended little successful March, shows information from BMLL Technologies, barroom a ample options expiry connected March 21. Such dates often spot larger volumes traded arsenic the derivatives that commercialized disconnected their prices are closed.

2/ AVOID EMERGING MARKETS

Hedge funds person sold retired of large emerging markets.

And truthful acold this year, they person maintained much abbreviated than agelong positions successful emerging marketplace stocks successful Latin America and Asia.

In Asia, stocks person been peculiarly sold successful ample amounts successful March, Goldman Sachs information showed. A abbreviated presumption expects an plus terms to decline, a agelong stake hopes it volition rise.

3/ CYCLING OUT OF CYCLICALS

Hedge funds person chopped their positions successful stocks whose show is intimately tied to the economical cycle. These companies, similar auto-parts manufacturers, immoderate jewellery brands and location furnishing stores typically conflict erstwhile consumers person little wealth to spend.

That determination coincides with accrued interest that tariffs are raising U.S. recession risks.

4/ U-TURN

Hedge funds person starting selling European car stocks, having snapped them up until aboriginal March, the Goldman information showed.

Speculators person piled into abbreviated positions connected the assemblage since Trump past week made nationalist a program to instrumentality a 25% tariff connected imported cars and airy trucks from April 3. A work connected car parts begins connected May 3.