Analysts are for the more optimistic on the performance of the markets inlast quarter of the year, considered historically bullish. On the one hand, the hedge funds they are betting on the options market on the rise of the dollar at the end of the year. On the other hand, analysts see a Wall Street still strong as it will celebrate its third year of gains next Sunday, which historically indicates an open door for further gains. Finally, as the period of US quarterly reports, analysts make predictions of significantly high profits in the intelligence sector.
Hedge funds bet on a strong dollar, weak euro and yen
- hedge funds around the world have stepped up their bets on the options market by banking on a US dollar rebound compared to most of the major G-10 currencies until the end of the year, reports BloombergThe basis of betting is the prediction that currencies such as the euro and yen will end up weakening, especially due to political pensions in France and JapanOn the other hand, the increase in bets in favor of the dollar could be a sign that the currency's weakness, triggered by the US government shutdown, may have run its course, while other major currencies are declining.
Euro-dollar put options expiring in December saw three times the trading volume of call options on Wednesday, according to data from the Chicago Mercantile Exchange Group. "We've seen hedge funds seeking a tactical long-term dollar strategy," said Mukund Daga, global head of currency options at Barclays Bank Plc., referring to expirations before the end of the year.
The euro was hit hard by the political turmoil in France, But its strength demonstrated this year against the dollar was seen as a further burden for European exporters, already burdened by Trump's tariffs. A slowdown in the single currency's rise would therefore be welcomed by the eurozone's trading partners. yen collapsed on speculation that Japan's likely new leader might favor a slower rise in interest rates, while the New Zealand dollar was hit by a 50 basis point rate cut. Among the Group of 10 currencies, the only exception is the Australian dollar, due to the Reserve Bank's hawkish stance on rates.
This morning the'dollar index is up 0,1% at 99,971. Theeuro is in its fourth day of decline, down 0,1% to $1,1615, after hitting a six-week low of $1,1598 yesterday. yen The Japanese yen hit an eight-month low of 153 per dollar overnight, then strengthened slightly to 152,76 this morning.
Wall Street: Three years of gains and the rally isn't stopping here.
La upward race of the US stock market it has been going on for almost three years, but if history teaches us anything, this means that it is only halfway there, say analysts interviewed by ReutersThe S&P 500 Index will celebrate next Sundayanniversary of the start of the bull market, October 12, 2022On that date, three years ago, the benchmark U.S. stock index had marked its lowest close of the current market cycle, following a series of monetary tightening measures by the Federal Reserve.
Since then, asurge in tech stocks and other megacaps pushed the index up nearly 90%. That gain is still lower than the average growth of more than 170% seen in the 14 previous bull markets since 1932, according to data from Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, as reported by Reuters. Those bull markets are lasting on average about five years. “History shows that once we get to this point, the trend tends to last longer,” says Ryan Detrick, head of market strategy at Carson Group.
Optimism about the profit potential of theartificial intelligence has been a major theme of the bull market, driving tech stocks like Nvidia at stratospheric levels in the last three years. But another factor has been the resilience of thesaving, with investors who have worries about a recession have passed. With the'inflation to ease, the US Federal Reserve has begun to reduce rates interest rates over the past year, unlike three years ago, when central bank rate hikes, implemented to reduce inflation, had also put pressure on stocks.
During the latest bull run, the best-performing S&P 500 sectors by far were the Informatic tecnology e communication services, up approximately 180% and 160% respectively. In addition to Nvidia, the main players in the bull market were Microsoft, Broadcom, Palantir, Alphabet, Google's parent company, Meta Platforms, Netflix, Apple Amazon, Tesla, Nvidia,
The bull run has led to high ratings. He rS&P 500 price-earnings contribution It has risen to around 23 times, based on 12-month earnings estimates for its constituents, near the highest level in the last five years and well above the 10-year average of 18,7, according to LSEG Datastream. The index's P/E ratio was 15,3 when it hit its cycle low on October 12, 2022.
JP Morgan sees tech earnings rising further
What further convinced investors were the analysts' estimates JPMorgan For the upcoming third-quarter earnings season, tech sector earnings are expected to grow 20,9%, up from 15,9% in June. Approximately 81% of tech stocks saw their estimates rise, led by Nvidia and Apple. Overall earnings are expected to grow 8% in the third quarter, with revenue rising 6,3%.
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