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#Market watch ride full#
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What are the membership benefits of a MarketWatch subscription? Support our journalism and join us on the journey to a better financial tomorrow. We invite you to subscribe to MarketWatch. Every day we work to provide the information you need to achieve success in money and in life. Our mission is to make sense of what the news means to you and your money. “There’s definitely potential for an inflection point right now.Why does MarketWatch require a subscription? “People are changing their mind every other day, or sometimes intraday,” said Kathryn Kaminski, chief research strategist at AlphaSimplex. Times ahead look tougher given growing Wall Street divisions on everything from recession risk to peak inflation. Over at AlphaSimplex Group, wagering against bonds and being long commodities helped their CTA fund gain more than 30% in 2022. Their buy and sell signals sit in a tight band close to current levels for a number of key futures, McElligott wrote in a note, meaning small moves either way could whipsaw CTA strategies. Charlie McElligott, a cross-asset strategist at Nomura Holdings, said Wednesday that a recent bout of short covering in equities by CTAs had left them delicately balanced, even as their cumulative global exposure to stock futures was back to being net long. Yet now they’re all at risk of facing choppy markets, with the S&P 500 vacillating within a roughly 100-point range for the past two weeks.
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The stellar performance has helped to soften critiques of strategies that largely lagged behind major asset benchmarks and hedge funds in the pre-pandemic years thanks to spotty market patterns.ĬTAs come in many shapes and sizes, and given their investing horizons and models differ, returns can vary across funds significantly. None of this should diminish the very real successes CTAs have notched this year with SocGen’s CTA index up 22%, the most in data going back to 2000. “There’s a reset happening across assets.” “You will not likely see another 10% decline in the 10-year and a 10% decline in equities,” said Mark Connors, head of research at digital asset management firm 3iQ. Meanwhile, stock valuations have fallen to about the historic average - not a bargain, but no longer expensive. The yield on 10-year Treasuries has yet to re-test the 3.1% level it hit back in early May. Recession talk is building, even as economic data and corporate earnings continue to point to a healthy business cycle.īond investors are torn between preparing for a rally triggered by a slowdown in growth or a deeper selloff powered by red-hot inflation. Now the case for any decisive one-way trades is less clear cut. “A period where trends are undecided and the market is moving both ways - those are the riskiest environments for CTAs,” said Parag Thatte, a strategist at Deutsche Bank AG.ĬTA short bets on pricey-looking stocks and bonds at the start of the year were a sure thing as the Fed turned aggressive to tame inflation at decade-highs. All that has the potential to spur a reversal in what’s been a one-way trend for the history books across assets from the big commodity rally and the historic bond rout to the stock selloff earlier this year. Skeptics now warn that inflation-fueling pressures in the supply-side of the economy might be easing, just as market fears grow that a hawkish Federal Reserve will endanger the economic expansion. Yet CTAs got a taste of the challenges ahead in May as their short equity and bond positions fell victim to a periodic rally in both asset classes while long commodity wagers delivered muted returns. A Societe Generale SA index shows the cohort known as Commodity Trading Advisors - who take long and short bets in the futures market - returned an unprecedented 19% in the first four months of the year and posted yet more gains this month.