No matter which way markets go, Goldman Sachs Group Inc. says some traders are modeled to sell stocks over the next week.
Cullen Morgan, an equity derivatives and flows specialist at the bank, expects that commodity trading advisers, or CTAs that surf the momentum of asset prices through long and short bets in the futures market, could be forced to sell after building $129 billion in long positions.
The trend-following cohort are modeled to sell $10 billion in a rising market, and up to $42 billion if stocks decline, over the next week. On a longer time frame of one month, CTAs are likely to buy $42 billion in a rising market versus $226 billion to sell should markets start to trend lower again.
Global stocks have been rising this year, with the S&P 500 Index setting record highs powered by large cap technology stocks like Nvidia Corp. and Microsoft Corp.
Nasdaq 100 futures positioning is near the highest in three years, with investors appearing to favor growth stocks, into the earnings season, a Citigroup Inc. team led by Chris Montagu wrote in a note. Positioning is now considerably extended long and one-sided, rising a further $3.4 billion last week to roughly $25 billion.
“Profit levels, in particular for Nasdaq are the growing concern, with positioning and profits extended,” Montagu said. “The average long position is near 5% in profit, elevating the risk of profit taking unwinds and creating a potential headwind for a continued rally in the near term.”
While industry statistics pointing to a succession crisis can cause alarm, advisor-owners should be free to consider a middle path between staying solo and catching the surging wave of M&A.
New joint research by T. Rowe Price, MIT, and Stanford University finds more diverse asset allocations among older participants.
With its asset pipeline bursting past $13 billion, Farther is looking to build more momentum with three new managing directors.
A Department of Labor proposal to scrap a regulatory provision under ERISA could create uncertainty for fiduciaries, the trade association argues.
"We continue to feel confident about our ability to capture 90%," LPL CEO Rich Steinmeier told analysts during the firm's 2nd quarter earnings call.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.
