Main US indexes edge green
Comm Svcs leads S&P sector gainers; Staples weakest group
Dollar slips; gold dips; bitcoin down ~1%; crude gains
US 10-Year Treasury yield edges up to ~4.38%
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GAP BETWEEN SPY AND QQQ SHORT INTEREST AND BULLISH FOR STOCKS - JPM
A gap has emerged in short interest on the SPY SPY.P and QQQ QQQ.O exchange traded funds (ETFs), which track the S&P 500 .SPX and Nasdaq 100 .NDX, respectively. And this is likely a bullish indicator for stocks, according to JPMorgan.
Analysts led by Nikolaos Panigirtzoglou noted that a similar gap opened in March 2020 and in the stock market correction of 2022. “In both instances, that gap proved a bullish equity market signal as it got eventually closed with the short interest of the SPY ETF declining towards that of the QQQ ETF.”
JPMorgan explains the discrepancy is likely influenced by how fund managers use each index. The SPY ETF is used more extensively by macro managers to adjust their stock exposure, thus when macro managers turn cautious the short interest in the SPY ETF rises more. That then opens a gap relative to the short interest in the QQQ ETF.
Indeed, the bank notes that macro investors remain cautious on risk assets including equities even as stocks focused hedge funds appear to have already rebuilt their positions from April, benefiting from the V shaped recovery of the past two months.
(Karen Brettell)
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EARLIER ON LIVE MARKETS:
US COMPANY GUIDANCE ON Q2 SO FAR NEAR WHAT IT WAS A YR AGO CLICK HERE
STICK WITH YOUR KNITTING AS IT'S NOT BUSINESS AS USUAL - CLICK HERE
PAST IS PROLOGUE: DOWNBEAT DATA AHEAD OF MAY PAYROLLS CLICK HERE
ROBINHOOD PRIME CANDIDATE TO JOIN S&P 500 IN REBALANCE, BOFA SAYS CLICK HERE
US STOCKS STEP BACK, BUT DEFENSE SHARES ATTEMPT TO CONTINUE TO GEAR UP CLICK HERE
WITH TECH ON A TEAR, NASDAQ TARGETS ITS HIGHS CLICK HERE
ISRAELI SHEKEL MAY NOT BE THE POSTER BOY FOR DISINFLATION STORY CLICK HERE
RETAIL INVESTORS TAKE ON RISKIER BETS DESPITE UNCERTAINTIES CLICK HERE
SPECULATORS STAY PUT ON WEAKENING CONSUMER CONFIDENCE - HAZELTREE CLICK HERE
EUROZONE BANK VALUATION REVIVAL TO CONTINUE - UNICREDIT CLICK HERE
QUIET START, TRAVEL SECTOR TOP FALLER CLICK HERE
BEFORE THE BELL: AWAITING THE ECB, AND NATO MEETING CLICK HERE
SWITCH 2 DEBUTS BUT NO FUN-AND-GAMES IN TRADE CLICK HERE
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