Quants Shift From Bearish, Unwinding $100bn of Inflation Bets – Bloomberg
2022.07.29 21:26
Quants Shift From Bearish, Unwinding $100bn of Inflation Bets – Bloomberg
By Sam Boughedda
Bloomberg reported Friday that traders have unwound approximately $100 billion of bearish stock-bond bets, helping a recovery in markets after the worst first half in history.
Citing analysis from JPMorgan Chase (NYSE:JPM) & Co. and Nomura Holdings (NYSE:NMR), the article stated commodity trading advisors have closed big short positions that were based on soaring inflation, resulting in a recent move higher for US equities and Treasuries.
Bloomberg wrote that “trend-following quants — who take long and short positions in the futures market, typically with leverage — aren’t setting the direction of markets, but are adding fuel to recent moves.”
The S&P 500 has gained 7.6% so far in July, although it is still significantly below its January high.
Commodity trading advisors are said to have moved from short to neutral in the 10-year US Treasuries and S&P 500 futures, according to JPMorgan, while Nomura said a significant amount of stock shorts were exited.
