It Is The Last Month Of 2024

In our analyses, we regularly examine current movements, identify possible influencing factors and assess the general market situation. However, these are not recommendations, but merely opinions and food for thought.We are in the last month of 2024 and it is clear that many investors have already significantly reduced their activities. The US labor market data due on Friday and the major futures and options expiration on December 20 could still cause volatility – provided that there is no new escalation in the geopolitical situation…The lower level of activity can be seen, among other things, in the hedge fund portfolios: although the US stock markets have continued to move in only one (positive) direction in recent days and weeks, the hedge funds have only a small long position in their portfolios…The relatively pronounced short position they held during the reporting season for Q3 figures in October was obviously not profitable. The reasons why they speculated on lower stock prices can be seen in the next chart: compared to the development of the US Dollar, the revisions of expected corporate earnings have developed in the negative direction… Actually, this should have led to lower stock markets… but what is (was) not can still be…The wait-and-see attitude of the majority in the market is also reflected in the indicator of ‘smart investors’: cautious accumulation continued in the background. However, they are showing little conviction and there is no clear trend in the indicator…The large investors also continue to prefer the sidelines: the indicator is neutral, which means that no new investment decisions are required…In November, sentiment became slightly optimistic again – but this is hardly surprising – but it seems to be losing momentum…Since September, the US stock market has been one of the strongest in the world. But here, too, it is clear that the outperformance of the world indices is losing momentum…Apart from a few individual exceptions, the Nasdaq stocks are providing even less inspiration. The ‘smart investors’ have accumulated only with little conviction during the past few weeks – and recently reduced their positions again, i.e. probably brought the profits in…Here, too, there has been a slight optimism recently, which is not surprising given the continuously rising trend…Europe has its (numerous) problems and has never been able to keep pace with the US stock market so far this year. However, during the last few weeks, the ‘smart investors’ accumulated while the Euro Stoxx 50 Index continued to lose level… Interesting!The recently very pessimistic sentiment now seems to be improving again, which was recently reflected in the Stoxx 50 Index with slight advances…Conclusion: There are currently no indications of becoming active before Christmas. The stock markets are showing an increasing number of indications that the good mood will soon flatten out. And then we still have the 17-year cycle in the back of our minds (see Pretiorates’ Thoughts 58)…It should also be noted that if unexpected surprises do occur, it is time to buckle up: the increasing absence of many investors ahead of the holidays is leading to lower liquidity in the stock market, which means that above-average volatility seems certain in the event of a surprise…That’s it for today!More By This Author:The ISM Economic Figures And The Power Behind Them
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