BAML is out with their latest hedge fund monitor. Last week we noted that hedge fund exposure to NASDAQ 100 was near a record high. This week, BAML‘s highlight is market neutral hedge fund exposure, which has increased significantly over the past week. Net exposure for market neutral hedge funds is nearing the peak reached in 2012. Below is some more detail on that topic as well as notable findings in other areas. Market...
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Analysts at Bank of America Merrill Lynch (BAML) upgraded their rating for the shares of J.C. Penney Company, Inc. (NYSE:JCP) saying that its capital structure is becoming stable. “Liquidity concerns are behind us for now, and fundamentals are becoming to bottom in the coming quarters,” wrote BAML analysts Lorraine Hutchinson and Jessica Lebo. The analysts raised their rating for J.C. Penney Company, Inc. (NYSE:JCP) from underperform to neutral with a $20 price objective. Hutchinson...
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In last weeks Ira Sohn Conference, Stanley Druckenmiller talked about the end of commodity super cycle and the worsening of slowdown in China. Druckenmiller expected the depreciation in China to result in a chain reaction in its dependent currencies. Almost similar outlook was presented by Michael Hartnett, analyst at Bank of America Merrill-Lynch, in his investment strategy report today. Negative Growth Expectations In China Growth expectations in China have turned negative, now at -8 percent, for...
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BAML is out with their latest hedge fund monitor. Last week they noted that hedge fund leverage had reached a level not seen since 2007 (the data was confirmed by a report from analysts at SocGen). This week they note that funds are reducing their exposure to equities but positions still remain at high levels. Hedge funds reduced their long S&P 500 positioning by ~21%; from $22.4bn to $17.8bn. Positioning remains in a crowded long after...
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Bank of America Merrill-Lynch in their weekly hedge fund monitor dated Jan 14 2013, predicted that the S&P 500 (INDEXSP:.INX) would see a major correction during the first half of 2013. The prediction was based on the Commitment of Traders Eurodollar futures positioning and its correlation to the S&P 500, but it has not materialized as yet. Bank Of America Merrill-Lynch Hedge Funds Monitor S&P 500 (INDEXSP:.INX) posted a 2 percent gain in last...
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Hedge fund leverage has been on the rise over the past few months. We have already covered the topic several times in 2013. According to the latest data the trend has continued and is close to the peak reached in 2007. BAML is out with its latest weekly hedge fund monitor (although they skipped last week). In the report issued on Sunday the 5th of May, BAML notes that hedge fund leverage is now...
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British pound is at oversold levels, hinting an impending short squeeze when the oversold positions are squeezed out. This is one of the conclusions that are drawn by BAML‘s macro monitor. BofA clients have been selling British pound positions and as British pound rallies against the USD, stakes in GBP will be reclaimed by hedge funds. Research concludes that this would be a good time to enter the GBP trade as outflows reverse. BAML also notes...
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Analysts at Bank of America Merrill Lynch (BAML) believe that a final settlement with EU antitrust regulators in connection with a complaint from Google Inc. (NASDAQ:GOOG) competitors that it is abusing its dominance in the European search market will have little impact on the search engine giant’s market position. BAML analysts Justin Post and Joyce Tran believe that Google Inc. (NASDAQ:GOOG) will be able to maintain its high market share because of its continued improvement...
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“Microsoft Is Not Adobe.” This is the reaction of analysts at Bank of America Merrill Lynch (BAML) on reports that hedge fund activist ValueAct Capital headed by Jeffrey Ubben, acquired ~0.75 percent stake or 60 million shares of Microsoft Corporation (NASDAQ:MSFT) for approximately ~1.9 billion; which represents ~25 percent equity holdings based on data from Bloomberg. BAML analysts believed that the stock price of Microsoft Corporation (NASDAQ:MSFT) went up because of assumptions that the...
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Goldman Sachs Group, Inc. (NYSE:GS) reported EPS of $4.29, beating Street estimates of $3.87, due to stronger revenues (particularly in investing & lending) and better non-comp expenses. Top-line results for Goldman Sachs Group, Inc. (NYSE:GS) were better than expected (+9% q/q and flat y/y ex DVA) and expenses came in lower than expected (though +36% q/q, given 4Q comp true-up), with a comp ratio of 43% and non-comp -19% q/q and -1% y/y. Mgmt bought back...
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BAML is out with their latest hedge fund monitor. The key point this week is that despite hedge funds taking on more leverage, Long/Short funds are still not overweight equities. BAML estimates that Long/Short hedge funds exposure at 28% net long, below the 35-40% benchmark. Hedge funds are not yet at overbought levels and this supports further upside for the US equity market. Furthermore, BAML models indicate that Long/Short hedge funds switched to growth...
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