Just yesterday we posted how of all BofA clients only hedge funds have been raking up their stakes in US equities, the trend seems ubiquitous. Societe Generale’s Hedge Fund Watch concludes the same, net long exposure in S&P 500 (INDEXSP:.INX) has been edging closer to an all-time high.
Hedge funds added up to their longs against the backdrop of weak economic data in US, SocGen expects a major sell off in the second half which will be motivated by profit-taking as opposed to any major headwinds hindering the performance of US equities.
Hedge funds have maintained a decidedly bullish stance on copper futures and base metal miners alike. A number of hedge funds have profitable short positions in the copper miners. HF Watch notes that bearish bets in copper futures peaked in last month. However SocGen predicts that short positions are overdone now and will soon reverse.
In precious metals, hedge funds are getting out of safe haven assets actively and the trend is expected to pick up speed in the next few months. Selling in gold has consistently increased in the past few months.
The decline in gold prices may have shaken the trust of some weak believers of the yellow metal, but the staunchest of gold supporters still see a lot of upside in the metal. Despite of the multi billion dollar losses that the gold industry suffered unexpectedly, Paul Singer said that the metal is a must-have while David Einhorn said that as yen weakens, gold will get stronger.
In forex, hedge funds are becoming more bullish on USD against virtually all other currencies. The highest amount of selling was seen in GBP and JPY against the USD.