Thu, Apr 27, 2017
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Hedge fund managers extremely bullish on US equities, betting aggressively on economic recovery

Tuesday, December 28, 2010
Opalesque Industry Update - Hedge fund managers have turned extremely upbeat on U.S. equities, according to the TrimTabs/BarclayHedge Survey of Hedge Fund Managers for December. About 46% of the 92 hedge fund managers the firms surveyed in the past week are bullish on the S&P 500, while only 19% are bearish.

“These bullish and bearish readings are the highest and lowest, respectively, since the inception of our survey in May,” said Sol Waksman, founder and President of BarclayHedge. “The enthusiasm is not surprising. Our Hedge Fund Index shows consistent gains in 13 of the past 14 years, and hedge funds are firmly on track for a profitable 2010.”

About 54% of hedge fund managers are bearish on the 10-year Treasury note, while only 14% are bullish. These readings are the highest and lowest, respectively, since May. In contrast, 39% of managers are bullish on the U.S. dollar index, while only 13% are bearish. These readings are also the highest and lowest since May. Meanwhile, 23% of managers aim to lever up in the coming weeks, the largest share in six months.

About 54% of hedge fund managers are bearish on the 10-year Treasury note, while only 14% are bullish. These readings are the highest and lowest, respectively, since May. In contrast, 39% of managers are bullish on the U.S. dollar index, while only 13% are bearish. These readings are also the highest and lowest since May. Meanwhile, 23% of managers aim to lever up in the coming weeks, the largest share in six months.

“Managers are betting aggressively on the economic recovery,” explained Vincent Deluard, Executive Vice President at TrimTabs. “While markets spent most of 2010 oscillating between overblown fears of a double-dip recession and irrational exuberance about a V-shaped recovery, an inflationary growth consensus has emerged heading into 2011. Moreover, the fact that every sentiment measure under the sun shows sky-high confidence could indicate that investors are a touch too jubilant. The bandwagon might be overly packed.”

About half of managers attribute higher Treasury yields to expectations of higher inflation and stronger economic growth, while only 4% cite the negative debt implications of the extension of the Bush tax cuts. Meanwhile, a majority of managers feels precious metals are the most overbought asset.

“We are a little surprised to see precious metals top the list,” noted Deluard. “Gold funds generally took in more money in 2009 than they have received in 2010, and our flow data suggests bonds are much more overbought than metals. Mom and pop have been dumping bond ETFs and mutual funds for two months, but only after they poured a staggering $705.5 billion into them between January 2009 and October 2010. If a bubble is to burst in 2011, we believe bonds are the strongest candidate.”

(press release)

Source

kb

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Alternative asset firm YieldStreet surpasses $100m of loans funded in less than 8 quarters[more]

    Komfie Manalo, Opalesque Asia: Alternative asset investment platform YieldStreet reported that it has surpassed $100m in loans funded in less than eight quarters from accredited investors and single family offices. YieldStreet was founded by Milind Mehere and Michael Weisz. In a

  2. Investing - Investor appetite for high-growth IPOs to be tested, Apollo boosts fund's stock allowance for 'diamonds in the rough', Hedge funds uncertain over outlook for Hargreaves Lansdown[more]

    Investor appetite for high-growth IPOs to be tested From FT.com: The US listings market is poised for a busy week with deals that will test investors' appetite for high-growth - but lossmaking - companies. Eight new listings are scheduled for this week, the most since October of 2016,

  3. Hedge funds holding Puerto Rico bonds are looking at a long battle[more]

    Komfie Manalo, Opalesque Asia: Hedge funds which bought Puerto Rico's distressed debt bonds are facing the prospect of a long road ahead to recover their investments as the Caribbean island is attempting to use a U.S. Congress-approved rule that allows it to exploit a bankruptcy-like proceedings

  4. Other Voices: "Winner-take-all" dynamics and hedge fund investing[more]

    A growing stream of thinking in microeconomics is the concept of "winner-take-all" dynamics. The idea seems simple. A combination of networking economics and classic economies of scale creates situations where there are just a few dominant firms or economic agents who are able to capture significant

  5. Investing - How Chipotle's comeback attracted big data robots and value investors alike[more]

    From Forbes.com: When William Ackman's ailing hedge fund Pershing Square Capital Management bet $1 billion on shares in Chipotle Mexican Grill beginning in July 2016, the stakes couldn't have been higher. Pershing Square was reeling from what would eventually be a near $4 billion loss in drugmaker V