Some of wall street's leading trading teams have stated that the extremely empty position of the market before the end of the quarter was the main driver of the massive us dollar rebound on tuesday, not due to a shift in investor perceptions of the war in iran。
The 500 index rose by 2. 9 per cent on tuesday, the largest increase since last may. The increase continued in asian markets on wednesday, with asia’s stock market growing at its highest level in almost a year, driven by the overnight statement by united states president trump that the iranian war might soon end. Major equity indicators in europe also increased by about 2 per cent。
According to the traders of goldman sachs and morgan chase, the wave was mainly a round of crowding: the stock market suddenly rebounded, more so because various market participants were released from empty space。
Trend-tracking funds such as hedge funds and cta have been making large-scale equities. The trading sector also expects that the pension fund will channel large-scale funds towards stock purchases at the end of the month; at the same time, the negative gamma position of option traders expires on tuesday, eliminating a point of pressure and providing further lido push。
In short, fast money has been waiting for a spark that ignites the surge, and trump mentioned that the war could end in two to three weeks, enough to become a catalyst。
The nasdaq 100 index rose by 3. 4 per cent that day, while the market value of the “scientific seven” increased by more than $700 billion, the third largest single-day increase since 2020. The benchmark brent crude oil price fell by $100 per barrel. The vix index measuring stock market volatility on wall street has so far fallen by more than six points this week。
Morgan chase industries sales paige hanson wrote: “inventors can find exit paths almost quickly from the start of the war, but from a market or global economic point of view, it is important to define what is really the decisive event that makes it possible to reassess risks and lower the probability of recession. How can we define the `end' of this war in terms of stock markets and global economic prospects of common concern?”
Despite strong performance at the index level, stocks were not matched. Goldman sachs traders described the market as having a maximum of 4 points on tuesday, with a full 10 points, as measured by its overall activity。
In the goldman sachs derivatives trading sector, traders claim to have seen the “large-scale hedge positions” in the standard 500 index, the nasdaq index, vix and the exchange trading fund being removed. Trader shayna peart stated that, as the date of the transaction advanced, “the warehouse position continued to be released”。
If this rebound is to continue, investors may need to see more details and clarity about the cooling path of the situation. The white house press secretary, caroline levitte, indicated that trump would address the local wednesday evening at 9 p. M. On wednesday to update the fighting。
Issues of concern to traders included when the strait of hormuz could resume navigation and how deep and long oil prices would fall. At the same time, with the fiscal season approaching, the market will look for signs to judge how the conflict affects performance in the first quarter and the wider economy。
Brian heavey of morgan chase stated that the bank's trader in charge of the technology and media unit reported that tuesday's financial flows were generally calm and that the negative gamma position had helped drive the index up。
He said, “there is no indication from our financial flows that this is more than just a wave of technical rebound — at least not yet available.”
