Tuesday, July 23

US stocks are rising in value: a market overview

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US stocks are becoming more and more interesting to investors

Analysts at financial services firm Citigroup have issued a market outlook. According to the report, investors are increasingly turning their attention to US equities. This has been evident in the number of new longs that have been in place recently. Their momentum was the highest for the whole of 2023.
Citigroup notes that the market has a 9:1 ratio of longs to shorts. Strategists at Goldman Sachs, who have analysed the behaviour of hedge funds, see a similar pattern. It turns out that they have been actively buying US stocks for some time, with the growth rate of such trades being the highest since October 2022. At the same time, the funds have continued to unwind both bullish and bearish bets on the securities. Interestingly, the market is bullish on US equities. Optimism started to build when the S&P 500 reached 4,200, which is considered a breakout.
Volatility is also falling. It has already fallen to its most stable position this year. It should be noted that these developments are taking place in a situation where the risks to the market related to the US sovereign debt settlement are still quite high. The authorities have not yet reached a decision on its ceiling.
One of the factors behind the increased interest in US equities has been a change in investor strategy. They shifted their attention from cyclical industries to the technology sector, where profits can be high. As a result, the securities of several IT companies began to rise rapidly in value. According to Goldman, large-cap US technology stocks outperformed hedge fund long positions in the first three months 2002.

US stocks - 2

US stock market overview

It was not only the S&P 500 Index that showed strong growth in June. Other US market indicators were also active.
1. The Dow Jones Industrial Average was up 0.11% at 33610.2. Leaders were Chevron and Salesforce, both up just over 1%. Merck fell 1.2%.
2. The Standard & Poor’s 500 rose 0.32% to around 4,297.5 points.
3. The Nasdaq Composite was up 0.6% at 13355.
Stocks in Casey’s fell more than 6% after the restaurant chain reported a profit cut. Chemical company Univar Solutions was slightly higher, up 0.2%. This was boosted by the announcement of the sale of the business to investment giant Apollo. The transaction was valued at more than USD 8 billion. Stitch Fix, which offers online tailoring assistance, was up 30%. The re-rating came after the company reported sales that exceeded analysts’ forecasts.
Despite the bullish sentiment, experts are still awaiting the Fed’s decision on a rate hike. The probability of a hike at current levels is around 73%.

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