Goldman Sachs: Tech Stock Momentum Factor Pullback Hits 28% in 17 Days, Deleveraging Near Exhaustion on July 19

According to Goldman Sachs partner Mark Wilson on July 19, U.S. stock momentum factors have retreated 28% from peak levels over 17 trading days, with technology, media, and telecom momentum factors declining 40% in the fastest, deepest selloff on record.

Regionally, KOSPI fell 27% from highs, U.S. AI-beneficiary stocks retreated about 25%, global memory chip stocks dropped 36%, and European semiconductors fell 23%. Wilson attributed the selloff primarily to crowded positions, concentrated leverage, and deleveraging rather than macroeconomic deterioration or earnings weakness, noting positive signals from TSMC and ASML despite subsequent stock declines. He believes the momentum factor liquidation process is near exhaustion but lacks near-term catalysts for immediate reversal.