What do we expect from the global market?
The market has not yet managed to reach 3500, and most likely it will not reach this month.
We believe that the market will grow until the end of the quarter, and we tactically open longs for the amount that, in a bad scenario, we are ready to hold up to 3500.
In addition, we aggressively sell put options at the 3500 level.
The reasons for the growth are purely tactical in nature:
- Huge end-of-quarter rebalancing. Inflows into equities from US mutual and pension funds, as well as from sovereign funds around the world will be about $280 billion - $50 billion more than at the end of the 1st quarter, when the market showed very good growth.
- lack of sources of bad news like important statistics or Fed meetings
Stocks do particularly well in technology companies.
Firstly, because they have fallen the most, which means they will receive the most money on rebalancing.
Secondly, the market is already very clearly putting the slowdown in the economy into asset prices.
We see this in the growth of yields on 10-year bonds, and in the fall of oil, copper and other commodities. When things slow down, growth stocks are at least some pool of hope.
And as yields rise, technology companies also receive bids from algorithms that automatically buy in this scenario.
We believe that the market will grow until the end of the quarter, and we tactically open longs for the amount that, in a bad scenario, we are ready to hold up to 3500.
In addition, we aggressively sell put options at the 3500 level.
The reasons for the growth are purely tactical in nature:
- Huge end-of-quarter rebalancing. Inflows into equities from US mutual and pension funds, as well as from sovereign funds around the world will be about $280 billion - $50 billion more than at the end of the 1st quarter, when the market showed very good growth.
- lack of sources of bad news like important statistics or Fed meetings
Stocks do particularly well in technology companies.
Firstly, because they have fallen the most, which means they will receive the most money on rebalancing.
Secondly, the market is already very clearly putting the slowdown in the economy into asset prices.
We see this in the growth of yields on 10-year bonds, and in the fall of oil, copper and other commodities. When things slow down, growth stocks are at least some pool of hope.
And as yields rise, technology companies also receive bids from algorithms that automatically buy in this scenario.
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