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Macro trading post8/8/2023 Both regulatory risk at 5% and climate risk/greenwashing at 7%, scored lower. This was closely followed by misinformation/data risk and cybercrime at 14%. It’s more likely that hedge funds would want data on auto loan delinquencies and credit card debt, which is more of a signal that the consumer may be in trouble, he said.Īccording to a live poll on the webinar, geopolitical risks and market risks tied as the top risks selected by 19% of attendees, while 17% cited the economic impact of recession as the main concern. “Traditionally hedge funds didn’t care about this data because consumer health wasn’t tied to a specific stock,” said Petrescu, adding they had to read individual company reports. stock market indexes suffered severe declines as it suggested that consumers were changing their spending habits. Other earnings reports showed that consumers were spending more money on food and basic essentials due to rising prices. 21, when home improvement retailers released a forecast of lower profits for the year, this showed that consumers were spending less on expensive goods such as big appliances and home remodeling. “Even if they’re not a macro-hedge fund they still need a view of the health of the consumer and interest rates,” he said. “Hedge funds are asking about more macro data sets,” said Chris Petrescu, CEO of CP Capital, a data consultancy to hedge funds, who spoke on the webinar,” in a follow-up interview. When searching for opportunities on Chinese stocks, Clark advised investors and traders to look at shipping data, corporate event data, and P&L data on various exporters and shipping firms. “I agree that macro is relevant, but coming into 2023, I see this much more of an active stock picker’s market,” said Mehta.ĭoug Clark, Managing Director of Equity Market Design at TMX Group, said data on the China reopening trade and inflation were two opportunities for equity traders to focus on. While quant hedge funds who had exposure to the value sector did well in 2022, Mehta predicted that more than one style effect would be drivers of performance in 2023. 12 webinar “Data Minds: Navigating 2023’s Bear Traps Using Data-Driven Signals.” But what happens in 2023 with Fed policy is going to be more nuanced,” said Asha Mehta, Managing Partner and CIO at Global Delta Capital, a systematic investment manager, who spoke on the Jan. “It’s certainly been a macro-driven market for several years. 14 showed that the consumer price index (CPI) had cooled off slightly at the start of 2023 from its peak to 6.4% in January with energy, housing, food, and other items, keeping up the pressure on prices, reported the WSJ. economy grew more than economists expected in January, which made investors concerned that the Federal Reserve would continue to keep interest rates higher for longer.įor example, a report from the Labor Department on Feb. With signs that inflation has cooled off, many were betting the Federal Reserve would cut interest rates in the second half of the year, reported The Wall Street Journal.īut a series of recent “hot” data points released in February on consumer prices, supplier prices and the tight labor market, suggested that the U.S. Investors kicked off 2023 with optimism that stubborn inflation had eased, which drove a significant stock market rally in January. interest rates.Ī big issue has been the inflation rate. New releases of macro-data have caused traders and investors to adjust their expectations, sparking volatility in markets and anxiety about the path of U.S. Financial markets are reacting to macro-events and news much faster than in the past, prompting hedge funds and other buy-side firms to hunt for new signals in data feeds.Įxperts on a recent webinar hosted by Wall Street Horizon (WSH) said that hedge funds and other buy-side trading desks are coping with faster reactions and market reversals in response to data releases and earnings sentiment.
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